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No-Fault Automobile Insurance: Who Really Benefits?

Apr 30, 2008
Twelve states in the United States have No-Fault Insurance programs, including New York, Florida and Pennsylvania. No fault automobile insurance is also available in Washington, D.C. The way that no-fault insurance works is that if you cause an accident, your insurance coverage only extends to your car and not to others. The purpose of no-fault automobile insurance is to cut down on lawsuits related to 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.

The two primary reasons states offer No Fault insurance are to ensure all drivers have access to immediate medical care following an accident, without questions and to decrease lawsuits.

No Fault insurance limits the amount obtained by clients in lawsuits filed following traffic accidents. Everyone involved is deemed to be not at fault, no matter who causes the accident.

In some cases, the cost of no-fault insurance raises the amount of insurance premiums for everyone. Because the insurance companies have to pay out, whether or not their insured is at fault in an accident or not, this type of insurance actually punishes those who have a good driving record while rewarding those who have a poor driving record or are reckless. If you live in one of the states where there is no-fault automobile insurance, make sure that you shop around for the cheapest premiums.

Under No fault insurance, each party involved in an accident is required to file a claim with their insurance company. This is aimed at eliminating the abuse of unnecessary medical testing. Following accidents, some drivers will go to chiropractors for years in hopes of obtaining a significant settlement in a lawsuit. No fault insurance eliminates abuse of the medical and legal systems and allows those who need treatment to seek medical attention for injuries.

No fault automobile insurance has both good and bad qualities. On the bad side, it offers no incentives for safe drivers by offering a safe driver discount.

Although, No Fault policies decrease the number of lawsuits and unnecessary medical costs, it also ensures all parties have access to immediate medical treatment for accident related injuries.
About the Author
Interested in automobile insurance? Check out www.aboutautomobileinsurance.com and learn about automobile insurance for women and young drivers and other related topics.
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