Are You In A No-fault State? Know What It’s All About
Although the majority of states require drivers to carry liability insurance in order to legally driver, some states follow a no-fault policy instead. If you are in one of these states, it is important to know what no-fault means and how you can still receive the proper compensation within this system.
The True Meaning of No-Fault
In the truest sense, a no-fault policy means that drivers cannot be held responsible in any way for the accidents that they may cause. Rather, the insurance company pays all of the expenses associated with the accident and no driver can be held responsible to pay more than what the insurance provides. None of the states that follow a no-fault policy are truly no-fault, however, as all of them allow drivers to sue other drivers for compensation beyond what is provided by the insurance company.
Adding Fault to a No-Fault State
Although states with no-fault policies may require drivers to carry insurance coverage to pay for their own expenses, they all allow the drivers to sue under certain circumstances. In fact, all of these states allow drivers to sue for non-economic damages that they may experience as a result of the accident. At the same time, each one of these states puts certain limitations on how much can be collected and on what type of circumstances can be brought to court.
The thresholds that states put on these lawsuits can be either monetary or verbal. Monetary thresholds are associated with the cost of paying for medical bills. In states with monetary thresholds, the medical bills must cost a pre-defined minimum before the injured person can sue. With verbal thresholds, on the other hand, the injured person can only sue if the injuries reach a certain level of seriousness. Each state defines what is considered to be serious and what is not. If the state determines that the injury is serious enough, the person that was injured can sue for compensation.
The Pros and Cons of No-Fault Insurance
The pros and cons of no-fault insurance are largely a matter of debate. While proponents of no-fault insurance believe that this type of insurance is less costly for drivers, the reality is that states with no-fault insurance tend to have higher insurance rates.
One of the benefits to no-fault insurance, however, is the fact that drivers can receive their compensation in a quicker fashion. This is because there is no haggling over who is at fault and which insurance company should pay. For states with no-fault insurance, the process can help keep the courts cleared from lawsuits since thresholds are put on whether or not lawsuits can be filed and the amount that victims can sue for.
Shannon Kietzman is a freelance writer and an authority on car insurance issues, including methods for auto insurance comparison. She helps others learn the basics of car insurance so they can make proper and informed decisions when choosing the coverage that is right for them.
Click the XML Icon Above to Receive Insurance Articles Via RSS!
