The Real Dirt on No-Fault Car Insurance
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Car Insurance Articles
By: Clifford F. Berman
Posted on: Mar 17, 2009 - 1:26:59 PM
The Real Dirt on No-Fault Car Insurance
No-fault car insurance? Are these people for real? If you live in a "No-Fault" state you're probably already acquainted with the ins and outs of no-fault insurance; however, if you're moving from an at-fault state to a no-fault state the concept can be mind boggling! After all, who ever heard of an accident involving two or more cars that really wasn't anyone's fault?
No, the legal system hasn't lost its mind entirely. No-fault coverage is a little more complicated than that (and yes, the bad guys do get their own in the end). Here's a quick look at the ins and outs of no-fault car insurance.
What is No-Fault Car Insurance?
The first thing to understand is that no-fault car insurance doesn't mean that no one is at fault in an accident. What it means is that insurance companies don't have to spend months arguing back and forth like squabbling children over who's going to pay for what before the judge hands down a decision about who was at fault. Insurance companies simply take their own driver by the hand and walk them away from the scene, promising they'll take care of everything.
That's almost exactly how it works. Unlike in an at-fault state, car insurance companies rarely attempt to regain their losses from the other driver's insurance provider-even if that driver was completely, totally, 100% responsible for the accident. There are cases where the toll in property damages and injuries is high enough that an insurance company might go after the other driver; however, as a general rule the two drivers simply go their separate ways until the time comes for their day in court.
Why Would Insurance Companies Want to Offer No-Fault Car Insurance?
There are more than 6 million car accidents in the United States every year.
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Wait. An insurance company voluntarily paying expenses for an accident that they really shouldn't be responsible for? Inconceivable! Well, it's not really up to the insurance company. The state dictates when no-fault applies, and the insurance providers that want to do business in that state go along with it. It's as simple as that.
Do Both Drivers Have to Pay Higher Premiums After the Accident?
Ahhhh, here's where karma (and the American legal system) step in. Both drivers' insurance companies might be responsible for their expenses, but that doesn't mean that both drivers will be punished because of the accident. The rule of risk still applies; the driver at fault will have a higher premium, while the other driver involved should see no difference in their insurance rates.
As mentioned above, no-fault car insurance is determined on a state by state basis. Currently, almost half of the states in the U.S. offer a no-fault policy to their drivers, although in some it's optional and drivers can choose to stick to their traditional car insurance policy. If you're being introduced to the no-fault system for the first time and you're completely baffled, relax. It's not taking the responsibility out of the legal system. It's just allowing drivers like you to get the results they need to get back on the road and back to their lives after an accident as quickly and efficiently as possible.
