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No Fault State Overview
Plenty of people have questions about no fault state car insurance after relocating to a new place. In a simple sense, no fault means that car insurance policies pay out regardless of who is at fault for the accident.
Understanding what it means to be in a no fault state can be complicated, but it is important that persons involved in an accident recognize their individual rights and responsibilities as part of a vehicle accident.
Anyone hurt in an accident will likely want to file an insurance claim. What happens after that depends on the individual insurance policies and the state laws governing the role that fault plays.
Fault Versus No Fault States
Every state has its own laws associated with car accidents, and perhaps one of the biggest distinctions between one state and another is whether or not the location is classified with no fault state car insurance or at-fault car insurance. In an at-fault state, the driver who caused the accident remains liable and responsible for all costs. In a no fault state, however, every driver must be covered by their individual insurance regardless of who caused the accident.
Twelve states’ laws provide for no fault car insurance. These states are Utah, Pennsylvania, New Jersey, New York, North Dakota, Michigan, Minnesota, Kansas, Massachusetts, Kentucky, Hawaii, Florida and Georgia.
Benefits and Disadvantages of No Fault States
The legal community does not agree on whether or not at-fault or no fault is the best approach towards car insurance. The primary advantage of no fault state car insurance is that it makes the process easier when an accident occurs, since determining fault requires legal work, resources and time. There are fewer disputes over car accidents in no fault states.
However, insurance has to pay for a person’s injuries in a no fault state even if that person didn’t cause the crash. The claimant’s insurance rates might spike as a result.
In the United States, a policy holder will be reimbursed by his or her own insurance carrier without any proof of fault. At the same time, however, he or she is blocked from seeking recovery through the civil justice system for losses caused by others.
In some states, this applies to meeting a threshold of injuries and damages that exceeds the amount covered by insurance, for example.
What Does No Fault Insurance Cover?
Typically, no fault insurance covers the hospital and medical bills for persons injured in a car accident.
Other expenses associated with personal injuries might be included in a car insurance policy, such as funeral expenses, lost income due to injuries, expenses that exceed health insurance limits, any insurance deductible, and essential services such as those for cleaning or childcare.
Not all of these will be available in every state so it’s important to read the fine print in the insurance policy.
What is Not Covered by No Fault Insurance?
No fault insurance does not cover payments or bills that are not linked to personal injuries after a vehicle accident. This includes vehicle theft, damage to other people’s property, damage to the claimant’s vehicle, or medical expenses that exceed the claimant’s coverage limits.
