If you don't carry auto insurance to protect those you hit, is it fair to expect another driver's insurance to cover you? This is the question that some states have addressed through "no pay, no play" laws.
Dating back to the 1990s, these laws are in effect in several states. They are designed to prevent drivers who break the law by not getting insurance from benefiting from a system they don't pay into. Most keep uninsured motorists injured in an accident from receiving damages beyond the costs of their medical bills, lost wages and property damage. This means these uninsured drivers cannot sue for non-economic damages, like pain and suffering. Other states' laws go further and prevent uninsured drivers from collecting full amounts for bodily injury and property damage.
States that support no pay, no play
Varying versions of "no pay, no play" laws exist in California, Iowa, Louisiana, Michigan, New Jersey, North Dakota and Oregon, according to the Property Casualty Insurers Association of America (PCI):
- North Dakota's law prevents recovery of non-economic damages for uninsured drivers who have been convicted at least two previous times for driving uninsured.
- Louisiana's law prevents an uninsured driver from recovering the first $15,000 in damages for bodily injury and the first $25,000 of property damage. There are some exceptions, such as if the driver at fault was driving while intoxicated.
- Oregon's law prevents recovery of for non-economic damages for drivers who neglect to carry insurance, who are intoxicated or who are injured while committing a felony.
According to PCI, public opinion polls show great support for "no pay, no play" laws, and that such laws hold up on constitutional grounds. It's also an issue of fairness, according to the group. In a press release about a "no pay, no play" bill in Montana (which the governor ended up vetoing in April 2011), the group argued that drivers who refuse to get auto insurance "should not be allowed to benefit from someone else's compliance with the law while simultaneously denying that benefit" to others.
In 2009, the American Insurance Association signed a joint letter with the National Association of Mutual Insurance Companies and PCI urging Oklahoma's governor to sign a "no pay, no play" bill on the grounds that it would encourage drivers to comply with state auto insurance requirements. That bill was vetoed -- but Oklahoma managed to pass "no pay, no play" legislation this year.
In his decision to veto the Montana "no pay, no play" bill, Gov. Brian Schweitzer disagreed with the previous opinions. In his statement to the president of the Montana Senate and speaker of the Montana House, Schweitzer explained that he objected to the bill because he thought the punishment did not fit the crime of driving without insurance. He also cited statements from insurance industry representatives that indicated they could not definitively gauge the effect the proposed law would have on auto insurance premiums.