How Can You Can Recover Your Damages When Driver Has No Insurance?

dreamstime_s_104477322Or if he doesn’t carry a large enough amount?

This is unfortunately a common question since here in Texas, 20% of drivers don’t have a liability policy, and from my personal experience, this number is much higher.

That means there are at least four million uninsured drivers on our roads. Yikes!

And that doesn’t even count the huge number of highly restricted “junk policies” our state legislators allow to be sold where the driver has been excluded from coverage by the owner.

A good personal injury lawyer will chase down these subprime companies, their insureds, and drivers and demand proof that there is no insurance. We have been successful at making some of them change their coverage decisions and pay claims, and when this doesn’t happen, sue the driver (and by extension his company) for our client’s damages and collect money that way.

Usually the other driver will have liability insurance coverage, but probably in the minimum amount of $30,000 for any one person’s injuries, $60,000 for all people he injured, and $25,000 for all vehicle damage.

Of course, this is often insufficient, especially if there are serious injuries with large medical bills and lost wages and/or multiple vehicles involved in the highway chain-reactions we see far too often on the highways in the Dallas-Fort Worth area.

In this case, if you and your attorney can negotiate a successful settlement with his liability adjuster or you have to file suit and either settle at a later stage of the litigation (which happens 99% of the time) or go to a trial, you will be paid this amount.

But what happens if and when he or she didn’t have insurance — or didn’t have enough? If you file a lawsuit and take a judgment, how will you collect your damages?

This is a serious problem that Texas drivers often have to deal with.

Why? We are one of the most debtor-friendly states in the country. Almost all property that most people own is exempt, i.e. it cannot be attached and sold by their creditors. Debtors’ rights were enshrined in the Texas Constitution as a big incentive to get people to move down here and start the Republic of Texas in the first place. More info about exemptions is below.

Further, filing bankruptcy can often liquidate or greatly reduce a judgment. I thought that last night when Stormy Daniels was asked by Anderson Cooper about the possibility of a $20 million verdict being taken against her.

But don’t let this discourage you. Although this imbalance has often led to unfair results, you have effective options for collecting money owed to you.

I have been helping injured people recover damages settlements and verdicts from negligent drivers for close to 40 years. I lay the foundation for collection at the beginning of a case. I investigate what insurance policies and assets the other driver(s) has.

There are different options I consider.

1. Filing on uninsured and under insured motorists coverage on your policy

Your best chance of getting paid back is by making a claim for these benefits. You are already paying your company to protect you from financial harm on the chance you are hit by a driver who does not carry liability insurance, so you might as well use this coverage. Or as I tell my clients, stop making your company richer by paying for this coverage if you don’t want to use it and cancel it. The same goes for your Personal Injury Protection benefits you may have paid for. More information about how this works is here.

2. Suing the driver

If the negligent driver does not have a valid insurance policy, often it’s because he can’t afford one. After all, we all know that it is the state law that you can’t drive without one and that if you are stopped by the police, you will be issued an expensive ticket. I have seen cases where the at-fault driver actually had insurance but either did not have the required proof with him or his company initially balked at payment, but I was able to make the company, pay so persistence is the key.

But if there is truly no insurance, even if you go to court and get a judgment against him, you are not going to get paid in full – or at all.

The state does has a process which allows you to file documents to revoke his driver’s license and registration if he does not pay the judgment within 60 days, which of course almost never happens. Then that person is allowed a second chance and can enter into a long-term installment agreement. However in the two times I think I have been involved with this process, no one ever paid off the judgment in full. So after weighing the court expenses, delay, and stress versus a small if any return, this is never a good option. Most attorneys will not handle these cases for that reason.

3. Garnishing wages and levying on bank accounts 

You know the debtor has a job and is earning money. Can’t you just demand that his employer pay you his wages directly? In many states you can through a process called garnishment. Unfortunately, Texas law only allows garnishment in very limited circumstances for unpaid taxes, alimony, and child support, not for personal injury claims. A levy technically permits you to lay a claim to cash that is sitting in the debtor’s bank accounts but again, this is problematic here.

4. Filing a lien on property

A property lien gives you rights to proceeds from the sale of the debtor’s property. But much of an individual debtor’s personal items are exempt, including clothing, furniture, appliances, and other typical household goods. Also exempt under Texas law are sporting equipment, household pets, a limited number of livestock, and two guns.

The law further exempts tools of the trade, which include those tools, equipment, vehicles, books, and other assets a person needs to make a living. The courts have often broadly interpreted this latter exception to include musical instruments, carpentry tools, computer equipment, and other tools of a second source of the defendant’s income.

What can you attach a lien to? You may be able to attach a lien to some of the equity in a person’s vehicle, but after auto loans are accounted for, there may be very little left and some vehicles are 100 percent exempt. You may have the right to certain jewelry, boats, campers, and other high value items.

Although an individual’s homestead is exempt, his other real estate is not. On the chance he has raw land or a second home, you may be able to attach a lien to it. Unfortunately, you can’t force a sale so you could wait many years before you are able to collect your money.

What should you do if this happens to you?

You should consult with a personal injury attorney immediately. We here at Berenson Injury Law fight to help our clients recover the compensation they deserve. I will discuss any potential problems with recovering your damages during a free consultation.

More on this topic:

Recovering money if driver is uninsured or underinsured

Texas drivers with underinsured motorists cases win key appeal

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