"No Fault" Insurance |
| Recently I got into an accident that wasn't my fault. And even though it wasn't my fault my insurance company is still trying to make me pay my $500 deductible, even though the damages were only $700. Does that make sense? I don't think so, then again a lot of what insurance companies do doesn't make a lot of sense to me. I think I'll be alright though because I can just contact the person's insurance who's fault it is and make a claim and have them pay for the whole thing, and for a rental car while it's getting fixed. That's the benefit of living here in California, because at least it's known that it wasn't my fault. Recently I stumbled upon a website that explained how some states have what's called a "No Fault" insurance system, which I think is completely preposterous and in the following article I will explain what "No Fault" insurance is and why we Californians are lucky we don't have it. | ||
| Auto | ||
| There are currently 12 no fault states. In states with no fault automobile insurance systems it doesn't matter who caused the accident. Each insurance company pays for the property damage and medical expenses of its policyholders according to the terms of the policy. If the property damage or medical injury is serious and expensive, the no-fault system may not apply and fault will have to be determined to identify the insurance company that is liable for the loss. | ||
| In an accident, under "no fault" laws, your auto insurance company will pay for your damages (up to your policy limits), regardless of who was at fault for the accident. Any other drivers involved will be covered by their auto insurance policies. Under a pure no fault system, drivers would be completely covered by their own policy, and would be barred from ever suing another driver for damages. | ||
| However, no state uses a pure system. Instead, all "no fault" states actually use parts of both the no fault system and the standard liability system (under which you're financially responsible for the cost of damages you cause). States do this by permitting lawsuits in certain cases. | ||
| It does guarantee every driver immediate medical treatment in the event of an accident, which is a good thing. And it's is also intended to reduce the legal and administrative fees associated with insurance claims. Which, in turn, should mean lower premiums, yet often times the liability issues that still remain will actually drive premium costs up. | ||
| And remember, because no state is pure no fault, drivers can always be held financially responsible for the cost of injuries they cause in certain circumstances. Some states do allow injured parties to sue if their injuries meet certain standard for severity, while others allow it when total costs reach a certain dollar level. That's why liability insurance is still so important, and why every "no fault" state requires it. | ||
| The disadvantages of "no fault" insurance far outweigh it's advantages. Which is a testament to how many states actually use it. "No Fault" insurance can be very expensive and does not cover things like your pain, suffering, emotional distress, inconvenience, and medical expenses or lost income that go above your established limits. And even in the event of a circumstance in which you are able to sue for liability, the lawsuit may be restricted by the certain limits to be reached: amount of money needed, severity of accident/injuries, etc. I'm definitely glad that my insurance doesn't work this way, and if you live in a state that requires it, as an avid accident victim, I feel your pain. | ||
| -Nick Garcia www.comcuts.com |
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