Playing It Safe with No Fault Auto Insurance
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UPDATED: Jan 20, 2012
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In 1971, Massachusetts became the first U.S. state to offer no fault insurance for drivers. Since then many states have followed suit, though none have made changes to add this since 1976. Although some states simply retain an option to carry a no fault car insurance policy, there are some things you should learn about in relation to this type of insurance. Though none of the states that have made it mandatory to carry a no fault insurance policy are truly 100 percent “no fault”, they closely resemble areas such as Quebec and Manitoba, which have put a pure no fault system in place.
Learning about what a no fault system is and whether or not your state is one is crucial when it comes to securing an insurance policy for driving. Being without the proper amount or type of car insurance coverage can lead to problems including legal ramifications. Of course, you may simply be considering this type of policy if you live in a state where this is optional but you would like to understand if it is right for you.
Understanding What No Fault Car Insurance Consists of
The name no fault insurance sums up what to expect from this type of automobile policy, fairly well. In states where no fault insurance is mandatory, it means that drivers and passengers of both cars are covered regardless of who was at fault.
So, what is the big deal? Here are some reasons no fault insurance is a positive advantage for drivers:
- Having no fault coverage in place means repairs and medical bills are covered by each side, which cuts down on the need for lawsuits. However, it does not eliminate lawsuits as a true no fault policy would do.
- No fault coverage means that by reducing the amount of lawsuits required to work out accident recovery, insurance companies incur a great deal less expense in relation to legal fees. The end result is that this cuts down on insurance companies’ costs altogether, meaning the premiums can be lower for policy holders.
- As a driver you may not be able to sue another driver, but you should basically be protected from being sued as a driver yourself in an instance where you are the driver at fault. Most suits outside a no fault policy are in relation to covering medical expenses above and beyond the policy’s maximum cap off amount.
- One major positive aspect of a no fault auto policy is that any and all injuries and medical expenses can be dealt with. With a no fault system an injured driver or passenger may be denied treatment until either individual health insurance or the liable party’s car insurance can be verified. No fault means no one has to go without treatment or even have it delayed.
Keep in mind, however, that no fault insurance, also known as Personal Injury Protection or PIP, is not entirely without faults of its own. Coverage varies between states but generally, there are some things that may not be covered even though many customers feel they should be. There are still some costs that the driver may be held responsible for such as injury or destruction of property.
Lawsuits generally result from injuries or medical bills that end up exceeding the individual driver’s own no fault car insurance policy terms. A pure no fault system does away with the need for suits concerning accidents, repairs and medical expenses completely.
Which States Do and Don’t Utilize No Fault Insurance
Because no states have made changes to being a no fault insurance state or not since 1976, it is fairly safe at this time to list which states have made it mandatory and which have made it an option. You should, however, always check with your state’s DMV or an insurance agent in your area before starting a new policy. This is especially true if you have recently relocated to a new state or are getting car insurance for the first time.
At this time states that have made no fault car insurance mandatory include:
- New Jersey
- New York
- North Dakota
States that have only made no fault auto insurance optional are:
- New Hampshire
- South Dakota
- Washington DC
No Fault Insurance vs. PIP
You may have heard of Personal Injury Protection or PIP insurance policies before. A common question that drivers ask is about the difference between PIP and no fault car insurance coverage. The thing is there is no difference aside from what it is called. The concept behind it is the same and covers drivers from being denied medical treatment in cases of an automobile accident with injuries.
There are, of course, certain issues that are automobile accident related that many drivers feel should be covered by no fault car insurance that are not. Some examples of these are:
- Property damage that falls under the umbrella of public property. This could include signs, posts or guardrails to name just a few examples.
- Pain and suffering
- Emotional distress or anguish that is solely mental and emotional
Depending on the state in which you reside, other things that may be covered under your no fault insurance policy may include:
- Any and all medical expenses including surgery
- Wages lost as a result to the accident or hospital stay
- Death and funeral costs incurred
The Bottom Line
Whether or not your state has made no fault car insurance mandatory for you as a driver, you may want to consider this type of insurance policy and coverage anyway. The best news is you can get your quotes today and find out just affordable it may be for you. By providing your zip code only you can get your competitive no fault insurance rates and begin to make informed decisions about your car insurance policy.