Final answer:
If you do not pay for damages when at fault in a traffic crash, you may face legal action, credit score impact, and garnishment of assets or wages. This also affects your insurance as risk pooling is used to cover the costs of accidents, with higher premiums for those with greater risks.
Step-by-step explanation:
If you are at fault in a traffic crash but do not pay for the damages, there can be several consequences. The other party involved in the crash may file a claim with their insurance company, which would then likely pursue you for reimbursement. This can result in a court judgment against you. Failing to pay can also impact your credit score and lead to legal action whereby your assets or wages may be garnished to fulfill the debt. Furthermore, your own insurance premiums may increase, or your policy could be canceled if the insurance company deems you too high a risk.
Car damage can be a significant financial burden, particularly without insurance. Insurance operates on the principle of risk pooling, where the insured contribute premiums into a common fund that is used to pay for damages incurred by the group. The cost of damages and accidents is shared among policyholders, with riskier drivers typically paying higher premiums to cover their greater likelihood of incurring damages.