No Fault Insurance

It is very important to understand what exactly is no fault insurance, before opting for one. Many people get confused with the term "No fault" and think that by going in for this kind of insurance for their vehicle, even if they have an accident, and are fully or partially responsible for it, there would not be any kind of penalty. However, this is not what a no fault auto insurance actually implies. Let us try to understand what is no fault insurance, by knowing about the kind of coverage it provides, the laws governing it in different states and its advantages.

No Fault Insurance Coverage

No-fault insurance means that if an accident occurs and the person gets injured or his car gets damaged, the only person he has to deal with will be his own insurance company. Whether he or the opposite party was responsible for the accident will have no bearing on it.

No fault insurance pays for and covers only those medical bills as well as lost income, which come within the limit of the policy. Any kind of expenses which are incurred over and above the limits of the policy are not covered. In case the medical bills and the lost income of the person are more than his policy limit, an option for him would be to sue the other party in the accident, if it is at fault. The rules and laws regarding the same vary from state to state, and have to be considered along with the insurance policy for making such claims.

Some states have laws, according to which a person can sue another party if the injuries caused by the accident are serious. Broken bones, internal injuries, severed limbs, are some of the injuries that fall in this category. On the other hand, some states have laws, according to which if the medical bills go over and above a specific amount, the person can sue the other party in the accident, which is at fault.

Some states, such as Pennsylvania and New Jersey, have their own system, which is known as the "optional modified plan". Here, any person can get insured either under "strict no-fault plan", in which he will not be able to sue the driver, even if he is at fault and cannot be sued himself even if the fault is his. Or he can opt to forgo the insurance, giving him the right to sue and get sued, when involved in an accident.

In some states, however, there might not be no-fault insurance, at all. In such a case, the auto insurance companies have to assign a specific percentage of fault to each driver, involved in the car accident. All this will go in the insurance records, and may increase the premium paid for the insurance coverage.

Advantages

No fault insurance is very advantageous in the sense that a person who has such an insurance does not need to run around, chasing after the driver of the other vehicle to get the vehicle damage report, health care benefits as well as income replacement benefits, he is entitled to. For instance, if the person has got injured in a car accident, and it was the person himself who was responsible for the accident, he would still have direct access to the medical benefits offered by the policy from his own insurance company. This way the person gets help right away, and there is no need for him to wait for the two insurance companies to arrive at a decision regarding who was at fault for the accident.

As can be seen, no fault insurance has many advantages and can be quite convenient in case of emergencies. Safe drivers, who follow all traffic rules, no longer have to suffer for somebody else's fault. Through no fault insurance, they do not need to sue or go to courts or hire lawyers to get their dues in case of an accident, as the insurance company will cover mostly everything for them.