No Fault Insurance What Is No Fault Auto Insurance?
Twelve states currently use a no fault insurance system. Insurance companies in these states pay out regardless of which driver is at fault in an automobile accident. No Fault insurance should in theory remove the need for costly litigation common with traditional fault based insurance systems. No Fault insurance policy holders may give up their right to sue the other driver involved, further reducing the number of automobile accident cases in court. The ultimate goal of no fault insurance is to lower car insurance premiums by avoiding the costs associated with going to court.
Most states in the United States of America such as Florida have modified no fault insurance law to allow the possibility to sue other drivers in the case of serious injury. No fault insurance in general covers economic damage (injury, property, lost wages). Pain and suffering can only be sought if a serious enough injury was incurred. Serious injury is defined differently by each state as either a monetary amount determined from medical bills or a certain level of injury like paralysis, disfigurement, or death. Lawyer groups oppose this type of no fault insurance law for obvious reasons, but they also contest that no fault insurance limits citizens right to sue.
States that define their threshold for suing as a monetary amount risk inflated medical bills to meet that threshold, but states that use verbal thresholds must then debate, sometimes as far as the supreme courts, what exactly is enough to justify suing. Both have their merits, but Michigan has made a strong case for verbal, also known as qualitative, by only allowing injury resulting in death, permanent loss, and disfigurement with much success.
Residents of Kentucky, New Jersey, and Pennsylvania have a choice between no fault insurance and traditional insurance. If they opt for no fault insurance they cannot sue or be sued. If they choose traditional they can sue other traditional policy holders, except for those no fault car drivers. Some criticize this system because it does not punish bad automobile drivers and gives no incentive to be a good driver.
The success of no fault insurance still needs to be decided and some states that were once no fault insurance states have reverted back to traditional car insurance. One study showed Massachusetts premiums to be 37% more expensive than that of California, a tort state. But where the system has apparently failed at lowering premiums it has been successful in states like Michigan, as stated above, at reducing the number of automobile accident cases in court.
If you live in a no fault insurance state get a free no fault insurance quote online now.
