Friday, March 20, 2009

No-Fault Insurance: Things You Might Not Have Grasped

By Chimezirim Odimba

The no fault auto insurance plan is used by a mere 13 US states. The rest of the states rely on fault in regards to auto accidents. This establishes how insurance companies will settle their claims. The decision would be based on defining each person's degree of fault.

The problem with this traditional rationale is that it can take up a lot of time and money. Plus, it crowds an already overcrowded court system. No fault is utilized in Colorado, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.

With no-fault, your insurance company pays no matter who is at fault. Coverage is provided for the plans limit. You would sacrifice any privileges to bring a claim to any other drivers that may have been caught up in the accident.

Regardless of who is at fault, medical and property expenses are covered. This type of insurance is used to eliminate lawsuits from being brought into court. Placing confines on pain and suffering although paying for other losses is how the system is made up.

There are actually two different types of no-fault insurance. The insurance company disburses to the policy limit for medical and loss of wages. You relinquish any chances of bringing forth a lawsuit. Currently this type of no fault in not in use in the US. Pure no fault is essentially out dated.

States use what is called modified no fault now. With this you could possibly bring forth a lawsuit even though your lost wages and damages are covered. When damages go beyond a particular amount after that it would be feasible to sue. Severe injuries only can go before the courts.

There are merits to this system. Insurance costs can be minimized by more rapid processing of claims and not using lawyers. Lawsuits are minimized which is good news for the courts.

Because all drivers are treated equally, many would prefer to use a different system. Pain and suffering not being compensated for is a claim that some make. There are both benefits and drawbacks in using both systems.

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