Understanding No-Fault Auto Insurance States
Your car got hit! Hearing these words makes your heart tremble. But what if this accident happened due to someone else's fault? Usually you make a claim from the other driver's insurance company, but did you know that some states follow different rules? Yes, these states are "no-fault car insurance" states!
The Storm of No-Fault Insurance
No-fault car insurance is a system under which in case of an accident, you directly make a claim from your own insurance company, no matter who is at fault. This system is different from the traditional "tort" system, where you have to make a claim from the insurance of the driver at fault.
This means, whether you were crossing the red light or the driver in front was talking on the phone, in both situations you will be able to claim medical bills and damage to the vehicle from your policy. It sounds good, but is it really so?
The Advantages of No-Fault
No-fault insurance has some advantages too. This system reduces disputes and court cases after the accident. Also, claims are received quickly, because you do not need to prove fault. Apart from this, the no-fault system is beneficial for minor damages, where both drivers may be partially at fault.
The Disadvantages of No-Fault
But every coin has two sides. There are some disadvantages of the no-fault system too. In serious accidents, where you suffer severe injuries, no-fault insurance will not be able to provide you full compensation. That's because many no-fault states have a "threshold" limit, meaning you can only sue the other driver for medical bills or serious injuries above a certain amount.
Also, the no-fault system can make insurance premiums a little more expensive because insurance companies have to pay claims for every type of accident, even if their policyholder is not at fault.
So what's right for you?
The question now is, which system is better for you? No-fault or tort? The answer depends on where you live and what your needs are.
The List of No-Fault States
Now we know what is no-fault car insurance and what are its pros and cons. But the most important question is which states follow this system?
In this chapter, we will provide you with a complete list of states with no-fault car insurance.
The Map of No-Fault States
As you can see, most no-fault states are in the Northeast, Midwest, and South. Here is the full list of no-fault states:
Arkansas
Delaware
Florida
Georgia
Hawaii
Kansas
Louisiana
Maryland
Massachusetts
Michigan
Minnesota
Nebraska
New Jersey
New York
North Carolina
Oregon
Pennsylvania
Rhode Island
South Dakota
Texas
North Dakota
Virginia
If you live in one of these states, you must get a no-fault car insurance policy.
Is your state no-fault?
If you don't know if your state has no-fault insurance, you can find out by:
- Check your state's Department of Motor Vehicles website.
- Ask your insurance agent.
- Search online.
Types of No-Fault Insurance
Now we know which states enforce no-fault car
insurance. But did you know that there are different types of no-fault insurance?
In this chapter, we'll tell you about the different types of no-fault insurance.
Threshold System
The most common type of no-fault insurance is the threshold system. Under this system, you have the right to sue the other driver only if your medical bills or injuries exceed a certain limit. This limit is called the "threshold."
There are two types of threshold systems:
Dollar threshold: In this type of threshold, you must have medical bills above a certain amount to sue.
Type threshold: In this type of threshold, you must have a certain type of injury, such as death, amputation, or severe permanent disability, to be able to sue.
Pure No-Fault
Some states have a pure no-fault system. In this system, you can never sue the other driver, no matter how severe your injuries are.
Hybrid No-Fault
In a hybrid no-fault system, there is a mix of threshold systems and pure no-fault systems. You will have the right to sue for some types of injuries but not for other types of injuries.
Exceptions
Although no-fault insurance requires you to claim from your own
insurance company, there are some exceptions. For example, if you live with another vehicle owner, or if your accident happened in another state, you may have the right to claim from the other driver's insurance.
What's Included in a No-Fault Insurance Policy?
So far, we have learned about the types and exclusions of no-fault insurance. But an important question is what exactly is included in a no-fault insurance policy?
In this chapter, we will tell you about the major covers of a no-fault insurance policy.
Coverage for Injuries
The most important cover in no-fault insurance is the injury cover. This cover provides you compensation for medical bills, rehabilitation expenses, and lost income for injuries caused in an accident.
Coverage for Property Damage
No-fault insurance also includes property damage cover. This cover compensates you for damage to your vehicle.
Mandatory Coverage
No-fault insurance is mandatory in some states. This means that you have to buy a no-fault insurance policy to drive your car.
Optional Coverage
Some no-fault insurance policies also include optional covers, such as:
Additional injury cover: This cover compensates you for injuries above the threshold limit.
Additional property damage cover: This cover gives you more compensation for damage to your vehicle.
Unclassified personal injury protection (PIP): This cover gives you more compensation for injuries caused in an accident, whether you are at fault or not.
Submitting Documents
To make a no-fault insurance claim, you will need to submit certain documents, such as:
Accident report
Medical bills
Car repair estimate
Police report (if applicable)
How to File a No-Fault Insurance Claim
So far, we have learned what is included in a no-fault insurance policy and what documents need to be submitted. But the most important question is how to file a no-fault insurance claim?
In this chapter, we will tell you about the steps to file a no-fault insurance claim.
What to Do Immediately After an Accident
Ensure safety: First, make sure that you and others are safe. If anyone is hurt, call emergency services immediately.
Accounting the accident: Note down the name, address, and insurance company name of the drivers of the other vehicles involved in the accident.
Inform the police: If the accident is serious or someone is hurt, inform the police.
Collect documents: Take pictures of the accident and fill out an accident report.
Notify Your Insurance Company
Follow the deadline: Notify your insurance company as soon as possible after the accident. It is important to follow the deadlines.
Submit documents: Submit all the documents asked by the insurance company.
Cooperate: Cooperate with the insurance company and answer all their questions.
The Claim Process
Review: The insurance company will review your claim.
Determination of compensation: If your claim is accepted, the insurance company will determine the amount of compensation.
Payment: The compensation amount will be paid to you via check or direct deposit.
What to Do if Your Claim is Denied
If your insurance claim is denied, you can appeal. To appeal, you have to follow the process prescribed by the insurance company.
How Long Does a No-Fault Insurance Claim Take?
The time taken for a no-fault insurance claim can vary. In many cases, the claim is settled within a few weeks. However, in serious accidents, the claim process can take longer.
If you have any other questions or if you need more information about no-fault insurance claims, you can contact your insurance agent.
