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"No Pay, No Play" Statutes

"NO PAY, NO PLAY" STATUTES ALLOW INSURANCE COMPANIES TO AVOID PAYING CERTAIN NON-ECONOMIC DAMAGES TO REPEAT UNINSURED MOTORISTS INJURED IN A MOTOR VEHICLE ACCIDENT

By: Patrick G. Murphy

Chapters 27-7-5.11 and 34-30-29.2 of the Indiana Code are commonly referred to collectively as the "no pay, no play" statutes. These laws allow an insurance company to avoid paying certain non-economic damages in a civil action to a repeat uninsured motorist who is injured or suffers damages in a motor vehicle accident. The law covers an individual (1) who owns a motor vehicle that is involved in an accident where the motor vehicle is not insured for at least the minimum coverage amounts required under Indiana law; and (2) who, during the immediately preceding five years, has been required to provide proof of future financial responsibility, a requirement triggered by the individual's prior operation of a vehicle without financial responsibility. Ind. Code § 27-7-5.1-4; Ind. Code § 9-25-8-6. Thus the law is aimed at individuals with a history of driving with no insurance, not first-time offenders.

If the uninsured motorist owns the vehicle that is involved in an accident, the statute applies to exclude certain types of non-economic damages, specifically:

  • Physical and emotional pain and suffering;
  • Physical impairment;
  • Emotional distress;
  • Mental anguish;
  • Loss of enjoyment;
  • Loss of companionship, services and consortium; and
  • Any other nonpecuniary loss proximately caused by the accident.
  • Uninsured motorists with a previous violation would still be eligible to recover out-of-pocket costs such as medical expenses, costs for treatment and rehabilitation, lost wages, loss of economic or educational potential, loss of productivity, and other pecuniary losses caused by the accident.
  • There are also some limitations to the applicability of "no pay, no play." The statutes do not apply to limit damages to the uninsured motorist where (1) the uninsured motorist with the previous violation is under the age of eighteen; (2) where the injury or damages were caused intentionally; or (3) where someone other than the uninsured motorist was driving the vehicle and that person is convicted of a crime in connection with the accident.

Since "no pay, no play" went into effect July 1, 2015, there are no reported court cases interpreting or applying these new laws. For now, please reference the plain language of the statutes and keep an eye out for the Indiana Supreme Court's anticipated decision in Patchett v. Lee, which will determine whether the collateral source rule provides for the admissibility of evidence of payments made by a state-sponsored health insurance plan. 

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