No-Fault Insurance Laws 101 - Brief Overview

No-fault insurance laws have been enacted in order to reduce the costs associated with litigating damages for an automobile accident so that premiums can be kept down to a minimum. The premise of these insurance laws is that in the event of an automobile accident, each party is responsible for the damage that is caused to their own property and passengers. This means that when an accident occurs, the automobile owner files their claim with their own insurance company, as opposed to filing the claim with the person who caused the accident.

Legal Options

The overall goal of no-fault insurance laws is to reduce the number of court cases related to automobile accidents. These laws accomplish this by first reducing the need to litigate a case in order to be paid by an insurance company, and secondly by reducing the legal options that are available to those involved in an automobile accident. For example, in states that have no-fault insurance laws, a person cannot sue another motorist, even if the accident was their fault, for minor injuries and property loss.

Exceptions

While legal remedies for automobile accidents are limited, there are a few exceptions. For example, some no-fault states allow legal suits to be filed if the victim of the accident sustains serious injuries. Serious injuries can be defined as an injury that causes long term disability, dismemberment or death. Exceptions vary by state so it is important to understand what your state allows in terms of legal remedies for automobile accident injuries.

Motorcycles

Another common exception to the rules of no-fault insurance laws is the motorcycle. Motorcycles are generally excluded from no-fault protection. This means that a passenger on a motorcycle can sue a car that hits the motorcycle in order to collect damages. A pedestrian hit by a motorcycle can also sue the motorcycle's owner for damages. Again rules and provisions related to this subject vary by state.

Filing a No-Fault Insurance Claim

After an accident occurs in a no-fault state, you are responsible for working with your own insurance agency to file a claim. What makes no-fault laws attractive is that you do not have to prove who was at fault for the accident. All you have to do is answer a few questions about the incident, present quotes for damage repair and answer any remaining questions that your agent has. There is no litigation needed and generally no need to get the other person's information.

While these laws have been shown to reduce premiums and to reduce court backlogs of automobile accident cases, it still can be frustrating to have to pay for someone else's driving mistakes. This is just one more reason to be a defensive and safe driver.

Sources:

http://www.ins.state.ny.us/r68_link.htm