Everything You Need to Know About No-Fault States So You Don’t End Up Out of Pocket
Friday, December 13, 2019, 6:00 PM | Leave Comment
After an accident, no matter how serious it is, comes the legal part of the aftermath. For those who are insured, the process can be a little easier.
There are multiple types of claims to be filed depending on the damage, the people involved, and the situation.
Insurance companies will require information about the circumstances of the state, and one of the things they will request is whose fault was it that the accident occurred.
In these cases, in the tort insurance system, the person at fault could be sued by the driver and anyone else involved in the accident. This could eventually affect premiums for the person to blame, and the process could actually drag on for some time. This can even be done if the fault is 50/50 in the accident.
However, another possible option (depending on the state) would be to go with the options of a no fault insurance system. The process for filing a no fault claim can be quite different, and has its own demands.
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What Is A No Fault Claim?
A no fault insurance claim is made by the person directly with their own insurance company after an accident, regardless of who was at fault for it. In this case, they would require payment from their own insurer for their medical expenses, out-of-pocket damages, or other bills related to the accident. The insurance will pay up until a certain limit, to be specified by them.
The purpose of these no fault insurance claims is to avoid lawsuits in small claims court, lowering the cost of car insurance by removing the possibility to sue. This also helps fasten the reimbursement for anyone who was injured. In this situation, each person involved in the accident will get compensated by their respective insurers.
There are different options of no fault insurance as well as different thresholds depending on the state. You’d need to check on the requirements and aspects according to your insurer and the state you are in. The claim is made through the personal injury protection (PIP) of an insurance policy.
Still, it is important to keep in mind that there are some downsides to no fault claim, such as not being able to get compensation for pain and suffering in the claim.
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What Are The No Fault States?
You can only get no fault insurance claims in specific states, also called no fault states. Currently, the U.S. only has 12 no fault states, which are: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Utah.
For some states, no fault claims are optional, and drivers might also get liability coverage if they choose. They are called “choice no fault states”, and some of which are Kentucky, Pennsylvania, and New Jersey. However, in order to choose to file a liability claim against the driver at fault, the driver needs to meet the “serious injury” criteria, which varies from state to state, and has to do with the severity of the injuries and a minimum amount paid in medical bills.
If you meet that criteria, you can either sue through a personal injury lawsuit or by filing a third-party liability claim. For the former, you can get compensated for your losses – including pain and suffering, which you wouldn’t be able on a PIP or no fault claim.
In no fault claims, drivers can have work loss coverage and medical cost reimbursement for themselves and passengers involved as well through PIP – no matter who was at fault for the accident. Because of that, all drivers in these no fault states are required to carry PIP and liability property damage coverage.
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What Do I Do After Filing The No Fault Claim?
The process and rules for handling a no fault claim with an insurance company tends to be a bit different than other personal injury cases. In fact, you are legally required to cooperate with your insurer. Unlike other cases, your insurance company might demand that you give them a recorded statement, and they may even require that you attend an appointment with a physician of their choice for the medical examination.
If you do choose a no fault system, you will not have the right to sue the other driver (an exception rarely made for severe conditions, depending on the case). The no fault coverage also only applies to medical expenses. Any property damage coverage would have to be acquired through collision insurance or property damage liability protection.
At the end of the day, no fault might not be for everyone and every case. It might be best to approach a lawyer with your case and the questions you might have, and check on the requirements of your state. So when you need to decide, make sure to check all of your options to find out what would be best for your case.
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