No-fault insurance state explained

In most states in US, auto insurance policies works under a traditional fault-based system. That is, insurance providers generally make payments only by evaluating each individual’s fault at the time of a motor vehicle accident. And in most cases, it takes long battles to determining who is at fault in an accident. So to eliminate this problem, 13 states have assumed a substitute no-fault system of insurance. These states include Florida, New York, Michigan, Colorado, Kansas, Massachusetts, Hawaii, Kentucky, North Dakota, New Jersey, Minnesota, Utah, and Pennsylvania.

Under the no-fault insurance system, when you met with an accident, your insurance provider will provide compensation for all the damages caused to you (up to the specified policy limit), without checking by whether there is any fault from your side or not. There are various elements of no-fault in almost all auto insurance policies. Just to say an example, property damage and medical payments are usually paid not considering of the insured’s responsibility.

No-fault insurance is mainly meant to decrease the auto insurance premiums by reducing the number of vehicle accident cases in the courts. This is done by providing limited payment for losses, and by controlling recovery for pain and suffering costs. The real no fault part of your vehicle insurance policy is generally known as the personal injury protection (PIP). It is also noted that parts of the insurance policy can come under various names such as optional basic economic loss (OBEL).

The PIP packages varies from one state to another, also are the different things the packages covers. The type of PIP and the amount also shows the difference. However, the general benefits include most expenses related with injury. The common benefits include compensation for loss of services, loss of wages, medical costs, death benefits, and funeral expenses. In Kentucky, District of Columbia, and Pennsylvania, individuals can decide whether they need to purchase personal injury protection or drive with out no-fault insurance policy. Keep in mind that no state is fully no-fault. Therefore, when you met with an accident you can be held financially liable for any cost of injuries in certain situations.

There are some states which permits injured parties to file a suit if their injuries comes under some specific criterion for severity. While there are some other states which allows this when the entire costs reach a specific dollar level.

Before purchasing any no-fault insurance, make sure that you have carefully checked all the rules and regulation of the policy. Also, check the coverage offered by the policy and the benefits provided by the insurance provider. It is also advisable to compare various insurance companies and settle on the one which best suits your needs.