What if I Can’t Pay My Car Insurance Because of COVID-19?

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Here in America while we fight to keep COVID-19 from spreading, many businesses have been forced to temporarily shut their doors and many workers have been furloughed or laid off. No work means no income, and the bills are piling up. What are you to do?

If you’re concerned about meeting your car insurance payments amid the pandemic, you’re not alone. In Indiana, drivers are required to have car insurance. But if you can’t afford it during the coronavirus, what does that mean for you in the event of a car accident?

You May Have a Grace Period

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Just because you can’t make an insurance payment during the coronavirus doesn’t mean your insurance will be canceled. Most insurance companies have a seven day grace period for late car insurance payments, but many insurers are revising their policy to accommodate policyholders as the pandemic rages on.

For example, Progressive is completely waiving all late fees and is refusing to cancel policies due to non-payments up through May 15, 2020. Meanwhile, State Farm is offering a 25 percent car insurance credit for most customers, but is advising policyholders to contact their insurance agents to discuss their options if they’re still unable to pay.

The state of Indiana has asked all insurance providers to issue a moratorium on policy cancellations and non-renewals. Additionally, the state has asked all insurance providers to allow a 60-day grace period for any late premiums between March 19 and May 18 of 2020.

Many providers are willing to work with policyholders during this difficult time. Depending on your insurance carrier, you may be able to secure an extension on your payment. Reach out to your own insurance provider to learn more about their payment policy regarding COVID-19.

Even though insurance companies are being more lenient with late payments, it is still important to know the rules regarding Indiana auto insurance and car accidents.

Indiana’s “No Pay, No Play” Law

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Indiana is a fault state, which means you can recover damages from the at-fault driver’s insurance company after a car accident. But if you don’t have car insurance, you may be at the mercy of Indiana’s “No Pay, No Play” law.

The “No Pay, No Play” law states that if you are in a car accident and do not have car insurance, and were previously cited for not having insurance, you can’t recover noneconomic damages even if you aren’t at fault. This also applies if you are a passenger in the vehicle. In short, you are required by the state to purchase auto insurance or you may be vulnerable to some pretty hefty consequences. 

You can still recover economic damages if you are not at fault. Economic losses like medical bills and property damage are easy to solve with money. But noneconomic damages are less quantifiable.

Noneconomic damages refer to compensation such as pain and suffering, emotional distress, mental anguish, loss of enjoyment, and loss of companionship. Unlike a hospital bill that can just be paid off, pain and suffering could affect the rest of your life.

If you are found to be at fault for the accident and do not have auto insurance, not only will you be unable to recover damages from the other driver but you will also likely be required to pay for the other driver’s damages out of your own pocket. This includes the cost of repairs to both vehicles, medical bills if anyone is injured, and any pain and suffering.

Even before the coronavirus, paying out of pocket is an extravagant expense that many Hoosiers simply cannot afford. Those who are unemployed at the moment could be crushed under the unexpected cost of an automobile accident without auto insurance.

If you have recently been furloughed or laid off and are thinking about what expenses you can cut, it may be best to keep paying your auto insurance premiums. It’s no secret that car accidents can be incredibly expensive, but could you afford the consequences of driving uninsured?

Help from a Local Car Accident Attorney

If you were injured in a car accident that wasn’t your fault, you still deserve a settlement that will cover your economic losses like lost wages and hospital bills. The car accident attorneys at Hensley Legal Group can help you file a personal injury claim and will deal with the insurance company on your behalf. And if you’re worried that the “No Pay, No Play” law may apply to your situation, we can help decipher whether or not it does. Call us or contact us online for a free consultation about your case.