No-Fault automobile insurance has been around since the 1970’s when legislation granted individuals the right to pursue medical reimbursements from their own insurance company in case of any sort of automobile accident. Although no-fault wasn’t practiced much back in the 70’s, it gained momentum in the 90’s and some states opted for passing legislation that transformed them into No-Fault Automobile Insurance states. For the most part these legislations were trying to get rid of long term litigation processes required often after an accident and the spending of dollars for these legal practices. In present day America there are twelve states that have No-fault legislation with regards to automobile insurance. The no fault auto insurance states are: Florida, Hawaii, Kentucky, Kansas, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah.
The No-Fault Insurance term basically refers to any automobile insurance system that requires a driver to have car insurance for their own protection, while placing limitations on their ability to sue the other driver in the event of an accident. This is personally good because it avoids long term processes and court fees that can result after a wreck. This also means that if you reside in one of the twelve states that have no-fault insurance legislation and get in a car accident, you will have to go to your own car insurance so they can pay for your damages regardless of who is at fault in the accident. Even if the car accident is not your fault (an example would be when you get rear-ended) your insurance company will still have to take care of the expenses. The other driver (or drivers) involved in the wreck, will also have to go to their own car insurance company in order to pay for their damages.
It is important to know that in a PURE no-fault automobile insurance system the driver would be 100% covered for any damages he or she makes and therefore, they wouldn’t have the need to sue another driver for anything. Although the state of Michigan comes pretty close to the “pure” version of no-fault coverage, none of the twelve states mentioned above have a truly “pure” system. They all use for the most part, little rules of the no-fault system and the regular standard liability system; in which you pay for the damages you cause. Because of this reason, it is important to understand your state’s regulations on automobile insurance and how they might be different from the pure no-fault system.
Another important thing worth mentioning is that some states will allow you to choose from the No-Fault insurance coverage and the standard liability system. One of these examples is the District of Columbia, where you can go with either coverage. This means however, that in the case of choosing the standard system, you will be required to purchase Personal Injury Protection Coverage, also known as PIP.
The No-Fault system, like every other legislation; has people that see it as a great idea and some others that completely oppose it and view it as extremely unnecessary. Supporters of no-fault insurance, base their claims in that the state would lose time and money to conduct hearings on every person that would go to traffic court in case of an accident. They also state that if you account for the money people would have to pay for court fees and proceedings, the drivers would be spending more than if their premiums were raised.
Critics of the no-fault car insurance system on the other hand, argue that it is not fair for “good” drivers to report a claim to their company when the accident wasn’t their fault, hence getting their premium raised. They also say that the standard liability system would teach the driver at fault to be more careful because he/she would be sued once and that would be enough. Many critics argue that is it very tough to find cheap no fault auto insurance.
Statistics also show that states that have adopted the No-Fault automobile insurance system also have higher monthly premiums than those who don’t. Because of these critics many of the states are thinking about going back to the at-fault insurance system and some state legislation are bringing automobile insurance back to their agendas, to see what is better for their respective state. It won’t be surprising however, if most of the states with no-fault insurance change it in the next few years because a lot of people are starting to oppose this measure of automobile insurance.
Last but not least, it’s very important to highlight that because a state’s No-Fault insurance law doesn’t excuse them for not carrying automobile insurance when they drive. Most of the states that are part no-fault, allow drivers to sue other in case they sustain an injury, in other words they would sue you if you don’t have Bodily Injury Protection. It’s for this reason that is important for a person to familiarize themselves with their home state’s automobile insurance laws, since sometimes they can be very difficult to understand. For more information on no-fault insurance and the regulations your home-state has on automobile insurance you can contact your Department of Motor Vehicles.
No fault auto insurance can either help you out if you cause the accident and reside in one of the twelve states, or it can wrong you by raising your premiums and by “punishing” you if someone else hit you (if the accident is their fault). So find out what the laws for automobile insurance are in your state, and if you are part of a no-fault state be sure to ask your insurance company on the mandatory coverage within your state.