How No-Fault Automobile Insurance Works | Insurance

By JoeyHudson
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There are twelve states in the United States which have No-Fault Insurance programs, including New York, Florida and Pennsylvania. No fault automobile insurance is also available in Washington, D.C. In the event of an accident caused by you, No-fault insurance coverage extends to your car only and not the other party. The main reason for no-fault automobile insurance is to decrease lawsuits following traffic accidents.

In states where there is no-fault insurance, you are limited to how much you can obtain in a lawsuit and each company will pay for the damages to the car of the drivers who were involved in an accident through no fault of their own.

No Fault insurance is offered for two primary reasons. They ensure that all drivers have access to medical care for injuries resulting from an accident, without questions. They also are aimed at decreasing subsequent lawsuits.

The other reason is to limit the amount of lawsuits that are filed for traffic accidents. Everyone will be deemed to be not at fault, no matter who causes the accident.

In some states, the premium for no-fault insurance raises the amount of premiums paid by all policyholders because the insurance companies have to pay related settlements, whether or not holder was at fault. No Fault insurance punishes safe drivers while rewarding those drivers with poor driving safety records by increasing rates and eliminating discounts. Comparison-shopping in the states where no-fault insurance is available can ensure the lowest insurance premiums possible.

Because no fault insurance requires that each person involved in the accident go through their own insurance company, this cuts down on unnecessary tests. Many people who get into an accident end up going to chiropractors for years afterwards, in hopes of gaining quite a bit of money in a lawsuit. The no fault insurance eliminates unnecessary abuse of the medical and legal system and allows those who need treatment to get it without question.

No Fault insurance has positive and negative benefits. No fault insurance lacks incentives for safe drivers and does not offer safe driver discount programs to reduce premiums.

However, it does manage to cut down on frivolous lawsuits and unnecessary medical costs and insures that anyone in an accident can receive the medical attention they need.

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