Car Insurance 101-No Fault Coverage
There are currently 12 states in the US that have what is known as a no-fault insurance system, meaning that in some instances, even if you are the obvious cause of an accident, your car insurance provider isn’t legally required to pay for the damages to the other involved parties vehicles, or medical expenses that might be incurred.
New Jersey, Kentucky, North Dakota, Utah, Minnesota, Michigan, Pennsylvania, New York, Massachusetts, DC, Florida, and Hawaii all have no fault insurance plans in effect. As a licensed driver in one of these states, you are required to carry auto insurance coverage for your own means, and you are legally limited as to being able to file suit against another driver in an accident. Your insurance company pays for damages up to your total insured limit, regardless of who caused the accident. This works out great, if you could be 100% certain that everyone has insurance coverage, which as many of us have found out the hard way, is not the case.
The reason that these twelve states have went with this system is because every insured driver gets immediate attention if there are injuries sustained due to an auto accident, regardless of financial status, or how much insurance they have. The plan was also put in place because it was believed to be able to lower the costs of attorney fees and free up court time usually spent dealing with traffic accident related lawsuits. The theory was that all of these things together would result in lower insurance rates, but for most, that ahs not been the case. Because there is no way to ensure that every single driver is insured, the rates often increase, rather than decrease.
Depending on the circumstances of the accident, some drivers may still be held accountable for the other party’s injuries, depending on the severity of those injuries, and the reason behind the wreck, especially if alcohol or drugs are involved. Even still, no state is purely on the no-fault system, and it's still possible for drivers to be
For example, there was recently a case where a lady accidentally hit her neighbor when backing out of her driveway. They were living in a no-fault state. Come to find out, the neighbor was actually partially at fault for the accident, because she admitted that she was sunbathing in the driveway, which turned out to be shared between two houses. She was taken to the emergency room by ambulance, where she was sent home after doctors could find no injuries requiring medical attention, but the driver of the car still felt like she should cover her neighbor’s medical bills, because she was the one driving the car. When the driver called her car insurance company to turn in the accident, they asked her was her neighbor covered under her own insurance policy, and when she said yes, they advised her that under the state’s no fault system, she wasn’t required to cover any of the expenses, and to forget about the accident. That story kind of makes you wonder if the no-fault system really is all that great, huh?
