No-Fault Auto Insurance Explained
If you’re fortunate, or depending on how you look at it,unfortunate to live in one of the twelve states that are under anon-fault auto insurance system, you can cause an accident, yetyour insurance company won’t pay for the other parties’ damages. If you live in a No-fault state (DC, FL, HI, KS, KY, MA, MI, MN,NJ, NY, ND, PA, UT) that means you live in a state that bothrequires drivers to carry insurance for their own protection andplaces limitations on their ability to sue other drivers fordamages. Your auto insurance company will pay for your damages(up to your policy limits), regardless of who was at fault forthe accident. Any other drivers involved will be covered bytheir auto insurance policies. Since all are required to carryinsurance, in theory, there should be no uninsured motorists inthose states. Stop laughing; the term “in theory” was used! These states opted for the no fault insurance system because itguarantees every driver immediate medical treatment in the eventof an accident. Further, it's intended to reduce the legal andadministrative fees associated with insurance claims. Again, intheory, this should equate to lower premiums. Unfortunately,often times the liability issues that still remain will actuallydrive premium costs up. However, because no state is pure no fault, drivers can alwaysbe held financially responsible for the cost of injuries theycause in certain circumstances – that’s the loop hole. Somestates allow injured parties to sue if their injuries meetcertain standard for severity, while others allow it when totalcosts reach a certain dollar level. Below is a classic case of a no-fault situation. Neighbor livedin a four-plex apartment building. It had a 4-stall garage alongwith a 4-stall wide driveway. Because the driveway was so wideit was second nature for the tenants to pull out of theirparking spots and turn around in the driveway instead of backinginto the street. One Sunday afternoon, one of the tenants decided to go visit afriend. She got into her car and began backing out of thedriveway in her normal manner. When all of a sudden she felt abump and heard a scream. At first she thought she ran over hercat who would occasionally escape. She opened her car door andfound half of a body. Scared half out of her mind, she shut thecar off and ran into the house and immediately called 911. The driver was too scared to go outside at that point. As far asshe knew, the half body, belonging to one of her neighbors, wasstill under the car and the driver was certain the injuries wereserious. Her left rear wheel had crossed her body from her thighon one side on the diagonal to above her pelvic region. Thedriver later learned that some strong man from across the streetcame over and picked up the car so she could get out fromunderneath. The neighbor announced that she was feeling fine and didn’t wantto go to the hospital. But the police and ambulance didn’t feelthe same way so they took her the four blocks to the hospital.Turns out the neighbor was sunbathing behind her car and somehowthe driver didn’t see her when she walked to her car. She endedup with no broken bones, no internal injuries; just a tire trackfrom her right thigh across to her left stomach. The driver felt absolutely terrible, accepted fullresponsibility, wanted to do everything and more to make it upto her. The next day, the driver phoned the insurance company toexplain to them what had happened. They asked her two questions.#1 Does she drive? (yes) and #2 Does she own a car? (yes). Theinsurance company informed the driver that due to No Faultinsurance the neighbor’s own car insurance would have to coverthe medical costs. The driver was clearly at fault, yet thedriver’s insurance wouldn’t cover the damages even though it washer fault. The driver went as far as to tell the neighbor to sue her sinceit was her fault and she felt totally responsible. The neighbormerely responded, “It was just an accident.” The lesson here -next time lay on the grass, instead of the drive way to sunbatheand risk the doggy doo. Interesting No-Fault system, wouldn’t you say?
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