What is no-fault auto insurance?

What is no-fault auto insurance?

In some states of the USA, it is mandatory to purchase no-fault auto insurance. No-fault auto insurance helps to cover the following:

  1. Medical bills
  2. Lost wages or lost income
  3. Other costs related to the treatment of injuries.

No-fault auto insurance helps to cover the medical expenses and lost wages no matter who is at fault. When another driver is at fault then no-fault auto insurance restricts the driver’s right to sue for non-economic damages.

If you have a minor accident then you do not need to file an insurance claim with an at-fault driver’s car insurance company if you do not have no-fault auto insurance. You can file an insurance claim with your car insurance agent to cover the medical expenses.

No-fault auto insurance states

Following are the no-fault auto insurance states in the USA:

  1. Florida
  2. Hawaii
  3. Kansas 
  4. Kentucky 
  5. Massachusetts 
  6. Michigan 
  7. Minnesota 
  8. New Jersey
  9. New York
  10. North Dakota 
  11. Pennsylvania 
  12. Utah

Auto insurance coverage in no-fault states

In no-fault states, drivers must purchase personal injury protection to drive legally in the state. But personal injury protection is optional in most states of the USA. The minimum coverage limit for personal injury protection is different in different states. You can cover your medical bills and lost wages due to disability if you have personal injury protection in your car insurance policy

The driver who caused the accident is liable to pay for the medical expenses of others in tort states. Tort states are those states that are not no-fault states. In tort states, if you cause an accident then you are responsible to pay for the damages such as lost wages to others. 

Why does no-fault car insurance exist?

In case of serious accidents, a lawsuit against the driver who caused an accident can be filed in no-fault states to cover the hospital bills and other injuries related expenses. No-fault insurance helps to in following;

  1. Fast and quick recovery of claims
  2. Reduce the cost of car insurance
  3. Reduce the legal cost of the car insurers and fewer lawsuits to defend
  4. No subsiding uninsured drivers

In some states of the USA, the no-fault insurance system increases the cost due to the following reasons:

  1. Filing medical claims in a fraudulent way
  2. Exorbitant payouts led by higher coverage limits
  3. It saves the bad drivers from punishment to change driving behavior.  

How does no-fault auto insurance work?

When you got injured in an accident then no-fault auto insurance work. You do not need to contact the at-fault driver’s car insurance agent to file an insurance claim to cover the medical expenses and to recover the loss due to lost wages. You can file an insurance claim with your insurance provider to file an insurance claim to recover the losses. The no-fault auto insurance works in the following manner:

  1. If you got injured in the car accident.
  2. No matter who is at fault in an accident you can file an insurance claim to recover the losses with your own insurance company. 
  3. After that, your car insurance agent reviews an insurance claim filed by you and assess the circumstances related to the accident.
  4. After assessing your insurance claim your car insurance agent pays you for the damages according to the coverage limit of your no-fault auto insurance.
  5. If the accident is minor then you cannot file suit against the at-fault driver. If you are at fault then you cannot be sued in the court in case of the no-fault auto insurance policy.

No-fault auto insurance only covers the medical expenses of the insured person, it does not cover the damages related to property. To cover the cost of damages related to the property you need to file an insurance claim with the at-fault driver’s car insurance company. 

Advantages of no-fault auto insurance policy

There are following advantages of the no-fault auto insurance policy. 

  1. No-fault auto insurance policy restricts filing a suit against the at-fault drivers in case of a minor accident.
  2. It takes less time to recover the losses in case of a no-fault auto insurance policy. 

How can you save on no-fault auto insurance policy?

To get the cheapest no-fault auto insurance policy you can compare the car insurance quotes from different car insurance companies. You should compare at least 4-5 insurance quotes to get the best no-fault auto insurance policy. Comparing the no-fault auto insurance rates is the best way to find the cheapest no-fault auto insurance policies.

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