What Happens If an Unlicensed Driver Crashes Your Car? (2024)

Reviewed By Adam Ramirez, J.D.

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There are nearly 100 million cars in the U.S., although car ownership rates have dropped steadily for the past few decades. A state-issued driver's license is required to drive a vehicle on public roadways legally. Nevertheless, many people continue to drive on expired or suspended licenses. What happens if an unlicensed driver crashes your car?

Accidents Involving Unlicensed Drivers

According to data from AAA, there are an estimated seven million unlicensed drivers on U.S. roads. Although approximately 3% of all drivers are unlicensed, they account for a far higher share of accidents and fatalities. Nearly one in five fatal accidents involve an unlicensed driver.

Unlicensed drivers may be too young to obtain a license or have not yet passed the licensing test. Inexperience, immaturity and poor decision-making lead to a disproportionate share of crashes and fatalities in this demographic. Unlicensed teen drivers are more likely to engage in reckless, dangerous behavior than their licensed peers or older drivers.

Some immigrants who lack the required documentation to obtain a U.S. driver's license also drive without a valid license. Although they may be experienced drivers and licensed in their home country, they may be unfamiliar with U.S. driving regulations and requirements and pose a danger to other drivers.

Another category of unlicensed drivers is those who have lost their license or had their license suspended because of traffic violations, drunk driving convictions or certain medical conditions. An average of 11,000 people die each year in drunk-driving crashes, many involving a driver with prior DUI offenses.

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What to Do If An Unlicensed Driver Hits You

If you're involved in a car accident with an unlicensed (and uninsured) driver, you should talk to your car insurer. For drivers in no-fault states like Michigan, it doesn't matter whether the other driver is licensed or insured because every driver recovers from their own insurer. In other states, drivers involved in an accident with an unlicensed, uninsured driver may be able to recover compensation under their uninsured/underinsured (UM/UIM coverage).

The average car accident settlement includes compensation for medical expenses, lost wages, vehicle damage and repairs. It may also include reimbursement for a rental car. You should discuss your coverage with your insurer. You may also want to consult a personal injury attorney to explore pursuing a lawsuit against the driver or other responsible party.

What Happens If You Let an Unlicensed Driver Use Your Car

Most insurance policies provide coverage if you allow another person to drive your car. (This is called "permissive use.") However, most insurance policies won't cover unlicensed drivers. If you allow an unlicensed driver to use your vehicle, you may be personally liable for any damage they cause. This can include damage to your car, damage to other people's property and compensation for personal injuries. You may even face criminal charges.

Many people used to leave their cars running when they went into a store or gas station. Others left their keys in the vehicle while it was parked in their driveway or hid them in the wheel well. These behaviors increase the risk that your car will be used by an unauthorized (and potentially unlicensed) person. They may also expose you to liability if an unlicensed driver uses your car and is involved in an accident.

What Happens If an Unlicensed Driver Crashes Your Car After Stealing It

Unfortunately, car theft and carjacking are common across the United States. In 2023, more than a million vehicles were reported stolen. Vehicle theft rates have risen steadily across the country since 2019. If you've been the victim of car theft or carjacking, you may worry about being held liable if the perpetrator crashes your car after stealing it.

The good news is that a car owner generally isn't criminally or civilly liable if someone steals their car and causes injuries to others or property damage. You won't go to jail or face a lawsuit for the damages caused by joyriders unless your negligence contributed to the crime (or you are legally responsible for one of the criminals). Filing a police report immediately after a theft occurs is essential to prove your lack of responsibility.

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Picking Up the Pieces After a Crash

You may worry about your car insurance rates climbing after a crash. Unfortunately, this may happen. Car insurance providers consider numerous factors when determining your policy rates, including your claim history. They also consider the accident rates and crime statistics of your area. A collision with an unlicensed driver or a car theft can increase their perceived risk and drive up your premiums.

You may also have to buy a new car if yours was totaled in a collision. Getting a new ride can increase your premium, since a new car is usually higher in value than an older vehicle. Additionally, auto lenders usually require you carry full-coverage collision insurance to protect the value of their collateral. These policies have much higher premiums than liability-only or no-fault coverage.

Frequently Asked Questions

  • Your insurance company likely won't reimburse you for damage to your vehicle unless you have a comprehensive collision coverage policy. Liability insurance or no-fault coverage usually does not cover theft. If you do have comprehensive coverage, you can recover compensation for damages or the actual cash value (ACV) of the car. Unfortunately, the ACV is often far less than it will cost to replace the vehicle.

    If any personal property was in the vehicle, you may be eligible for reimbursement under your homeowner's insurance or renter's insurance policy. Some credit cards also provide protection for purchases.

  • If you allow an unlicensed driver to use your car, you may be liable for any damages they cause. Your insurance probably won’t cover an unlicensed driver, so you may have to pay out-of-pocket for any property damage or personal injuries that the unlicensed driver causes. In some states, allowing an unlicensed driver to use your vehicle is a criminal offense and you may face criminal charges.

  • In the United States, anyone can file a lawsuit for any reason. If you are sued, you must file a response (and pay a fee). Although the court may dismiss the case or determine you are not liable for anyone's damages, a judgment can be entered against you if you do not respond within the applicable time. You should consult an attorney if you are served with notice of a lawsuit.

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