Road and Traffic Accidents

What Happens If You’re In An Accident Without Insurance

Being involved in a car accident is stressful enough, without having to worry about the insurance implications. But just because you haven’t organised insurance coverage with a car insurance company, does not preclude you from making a car compensation claim. Read on to find out more about how to claim compensation for a car accident if you don’t have insurance.

Compulsory Third Party (CTP) insurance

Under the Compulsory Third Party (CTP) insurance scheme, all vehicle owners in NSW are required to have CTP insurance coverage. This insurance coverage is included every year as part of your motor vehicle registration and covers any injuries that arise as a result of an accident with another vehicle.

If you have been involved in a car accident, you are entitled to make a car accident claim against the insurer of those who has caused the accident. Victims of car accidents are covered by the CTP scheme, and car accident claims can be made against the insurer of the other driver.

Parties involved can lodge an accident notification claim with the CTP insurer of the other driver within 28 days of the accident. For this claim, a party can receive up to $5000 in compensation for expenses incurred for up to 6 months after the accident occurred. A personal injury claim can also be lodged within 6 months of the accident. This claim is for when expenses are expected to amount more than $5000, or that recovery time for any injuries will exceed 6 months.

What is not covered by Compulsory Third Party (CTP) insurance?

CTP insurance will not cover any damage caused to your vehicle or anybody else’s vehicle or property. Therefore, any property damage caused in a car accident will have to be paid directly by the party at fault. In such a case, parties involved in a car accident should negotiate and agree upon a settlement amount. If an agreement cannot be reached, legal action may be necessary.

While only CTP insurance is legally required in Australia, it is highly recommended that drivers also pay for Comprehensive Insurance to cover themselves in light of property damage.


What if another party was at fault for the car accident?

You should assess how much compensation you will need, and send the party at fault a letter of demand informing them of this amount. This letter of demand will request payment for your injuries and/or any damages to your vehicle. Such a letter should set a specified time for the other party to reply, and should inform the other driver that if they have not replied within that time, you will resort to legal action against them.

Drivers at fault may make a settlement offer, which may include an instalment plan if they have financial difficulties in paying the compensation amount as a lump sum. If the party with financial responsibility refuses to pay or does not have the capacity to pay, legal action should be considered.

What if I was at fault for the car accident?

If you were at fault for the accident and have no insurance, you may personally be required to pay compensation to the injured party for their damages. You may be deemed responsible for the accident if you were:

  • Driving over the speed limit
  • Driving while affected by alcohol or drugs
  • Breaking road rules

If the other party has insurance, their car insurance company will try to recover money from you for the damages. If the other driver does not have insurance, they themselves will personally try to recover money from you for their costs.

The other party will send you a letter of demand seeking a monetary amount, or they may seek an offer from you. You should respond to this letter immediately and discuss a settlement plan. If you cannot afford to pay the other party in a lump sum, you can negotiate for payment in instalments. You can also inform the other party that you do not have insurance, and provide evidence of your income, assets and expenses to prove your financial position and let them know you are not in a position to offer a higher amount. If you cannot meet the medical expenses or needs of the injured party, you should seek legal advice or representation before legal action can be brought against you.


For more information and legal advice about a motor vehicle personal injury claim, get in touch with Schreuder Partners today.

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