Currently, there are 12 states that are considered no-fault insurance states. You may be wondering what that means exactly. No, it doesn’t mean that everyone in these states drives around recklessly and bumps into other cars, people and pets before walking away without facing any consequences. It also doesn’t mean that if you live in a no-fault state that your insurance company will pay for all accidents, no questions asked. What no-fault states do that other states don’t is they require Personal Injury Protection (PIP) as part of the state’s minimum insurance requirements. The PIP coverage is then used to take care of losses incurred in an accident, regardless of who caused the accident. Basically, it becomes a shared cost. When you live in a no-fault state your right to sue for the losses incurred by a car accident are reduced significantly with both parties paying for the accident. Read on to understand more fully.
Which States Are No-Fault States?
The 12 no-fault states include the following: Kansas, Kentucky, Hawaii, Massachusetts, Minnesota, Utah and North Dakota as well as the following states, which have verbal thresholds: Florida, Michigan, New Jersey, New York and Pennsylvania. A verbal threshold refers to an injury resulting in the loss of a limb/member or function. Each state’s rules vary, so you have to look at your state’s laws in order to know exactly what being a no-fault state means to you.
What Is No-Fault Insurance?
Having no-fault insurance means that if you get into an accident, your insurance company will pay, up to limits, some or all of your medical expenses and earnings lost due to the accident. What is unique here is that your insurance carrier will cover injuries, even if you’re the one that was at fault in the accident. Typically, in states that do not require no-fault insurance, you are only covered by your insurance for your own losses if the other driver was at fault. If you only had the minimum Liability Insurance and you were at fault, your insurance company would only cover losses to the other driver. You’d be on your own to pay for repairs or to buy another car unless you had Collision Insurance.
Is it a Good Thing to Live in a No-Fault State?
One good thing about living in a no-fault insurance state is that there is no wait time for getting compensated by the insurance company after filing the claim. This is because there’s no need to prove who was at fault. A negative is that you’re usually paying a little bit more than if you were able to carry Liability Insurance alone.
Is There Anything that Is Not Covered in a No-Fault State?
Yes, you can never make a claim for “pain and suffering” in a no-fault state with your Auto Insurance. Also, you can only pursue a claim beyond what is stated in the policy if you’ve reached your limits for Medical Coverage. Your insurance company will cover around $3,000 or else it will require documentation of severe injuries (broken bones, dismemberment, etc.) and proof that you still have medical problems caused by the accident. If you qualify, you are permitted to file an additional claim to the one covered.
Essentially, the no-fault insurance law is meant to simplify the way car accident cases are dealt with in the courts and to reduce the number of lawsuits. These limitations are in place as an attempt to circumvent the court system through shared responsibility. There are checks-and-balances system to prevent abuse and fraud, however. Also, each state has different laws. Not all no-fault states have the same verbal or monetary thresholds, so speak with an Insurance Specialist to find out what our terms are: AIS (855) 919-4247.
I Live in a No-Fault State but I Want Compensation for My Injuries from the Other Driver. What Can I do?
To bring a claim against the at-fault driver in a no-fault state you have to meet the serious-injury threshold. Now, how do you define serious or grave? The law is usually pretty explicit about injuries, stating that you only have an alternative recourse if you: 1) fractured or broke a bone, 2) became disfigured, 3) faced the limitation of use of a body organ or member, 4) faced a significant limitation of use of a function or system or 5) were fully disabled for 90 days or more. Just saying you were traumatized and need to seek therapy will not suffice, unless you were so traumatized that you were unable to do your life’s normal activities for 3 consecutive months. This would require sufficient proof of your claim’s validity.
Should I Avoid Giving a Recorded Statement to the Other Driver’s Insurance Company if I Live in a No-Fault State?
What you say to an insurance company actually matters less if you live in a no-fault state because there is not as much of a battle between insurance companies behind the scenes. Why? Because you’re restricted in your right to sue. In fact, it’s required by law that you cooperate with both insurance companies. Chances are that your insurer will be the one asking for a recorded statement. You may even be required to have a medical examination selected by your insurance company if you are claiming serious injuries, especially if they exceed $3,000. If you do not cooperate, your insurance company may deny your claim and has every right to do so according to the law.
In addition to Washington D.C, there are 3 add-on no-fault insurance states that allow a driver to buy Personal Injury Protection (PIP) as an add-on or endorsement to your policy: Arkansas, Delaware, and Maryland. You will then be covered by your insurance company, up to terms and limits, even if an accident is determined to have been your fault. Because these add-on states are not no-fault states, the injured can still sue the party at fault.
Buying the Right Insurance
Regardless of whether the state you live in is a no-fault state or not, you always need to tailor an Auto Insurance policy to your unique needs. Everyone’s driving habits and insurance requirements are different and dependent on lifestyles and a whole host of complicated factors. Speak with a reliable and trustworthy agent today to find out what your state requires and what works best for you at the lowest price: (855) 919-4247
The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.