The Basics Of No Fault Car Insurance Coverage

Currently, twelve states in the United States have instituted no-fault car insurance systems, and if you live in DC, North Dakota, New York, Hawaii, Florida, New Jersey, Pennsylvania, Massachusetts, Kentucky, Michigan, Utah, or Kansas, you probably are already familiar with what this means for you. The way these systems work is that in these states, if and when a car accident occurs, your own individual insurance coverage is required to pay for any damages to your vehicle, and your medical expenses resulting from the accident. Basically, this means that even if you are involved in an accident that is deemed your fault, your insurance still has to cover these expenses.

These states adopted this system because of alarmingly high legal costs rising from auto accidents, sustained damages, and medical bills from those accidents. The courts were being flooded with these cases, and the legal systems simply couldn't handle all it was required to, because of these suits. While this is a good thing for drivers involved in accidents, it can also be seen as a bad thing as well, because for most people, this means that their insurance premiums will rise, based on these policies being in effect. The insurance companies assume more risk by insuring people who live in these states, so to adjust for that risk; they have to charge higher rates, if they want to make a profit.

If you live in one of these states, you can still go to court if need be with an auto accident case, but there are stricter requirements. In most instances, if you are involved in an accident and the cost to repair your damaged vehicle and cover your medical bills exceed the amount covered by the no-fault insurance system, then you can take the other party to court, to recoup the rest of your losses.

Each individual will be required to file a claim with their own insurance provider each time there is an accident, rather than having to deal with the other party's carrier. This means that regardless of whose fault the accident is, everyone's damages and medical expenses will be paid, to the extent allowed by their policy. While the premiums may be higher, this can save those involved in accidents a lot of out of pocket money, because even if they did take the other party to court, it could take years to receive any money from a judgment.

There is a lot of debate about this type of car insurance system, but the states that have implemented it claim that is the best solution, both for the state, and drivers. It remains to be seen whether other states will implement this plan in the future.

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