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No Fault Car Insurance Explained

No fault car insurance is a type of insurance that will pay for the bodily injuries and car repairs for the policyholders’ vehicles no matter who caused the accident. States that allow for people to have no fault car insurance also require that their drivers retain some liability coverage. In a completely no fault system, both parties involved in an auto collision would file claims with their own insurance companies and repair their own vehicles; they also would be able to pay for their own damages. This system eliminates the ability for either side to sue the other.

What is No Fault Car Insurance Coverage?

In the United States, no state operates under the purely no fault system, which is the reason that every state has minimum requirements for how much liability coverage drivers must have to drive legally in their states. Liability coverage contains a bodily injury liability policy as well as a property damage liability policy. With both these policies in place, states limit the times that drivers can sue each other in the event of an auto accident.

Currently, only 12 states in the union operate under the no fault system. These states are Washington, D.C, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah. All 12 of these states also require that their drivers carry liability insurance, which pays for the medical expenses of people hurt and the property damages suffered in an auto accident where one person has been found at fault.

No Fault Insurance Explained

As the states listed above will allow for lawsuits under some circumstances, people driving in those states need to remember to carry their state’s minimum requirements for auto insurance. For example, in the state of Utah the state’s minimum requirements are written as 25/50/15. The first number means that $25,000 is required for the bodily injuries of one person. The 50 means that $50,000 is required by the driver for at least two people in the entire accident. $15,000 is for property damages done to the other person’s vehicle and the other property damaged in the accident such as utility poles.

PIP Car Insurance Information

The liability coverage that states require does not pay for the policyholder’s injuries and vehicles, which is why no fault states mandate that their drivers have Personal Injury Protection (PIP) insurance (not to be confused with “SR22 car insurance” which is really a completely different concept). PIP insurance is no fault car insurance and can cover an array of expenses and people. The people covered by this policy are the policyholder, everyone named on the policy, everyone living within the policyholder’s household, the passengers in the car at the time of the auto accident and people driving the car with the policyholder’s permission. Some policies will even cover the policyholders and members of their family if they were hurt as passengers in another car or as pedestrians in an auto accident.

PIP insurance does not just cover several people, but it also covers several different expenses for all of these victims of an auto accident. Sometimes fatal casualties occur when two or more vehicles collide with each other and funeral and burial expenses will need to be paid. The PIP insurance policy will pay for these expenses in the event that someone passes away during an auto accident, no matter who caused the accident.

No Fault Car Insurance Accident

Auto accidents may not cause deaths, but it may cause serious injuries to people. These injuries may require that the patient undergo hospitalization, rehabilitation and other treatment such as surgeries. All of these expenses can be exorbitantly expensive, but with PIP insurance, these expenses will be paid for. At the time that the seriously injured are recovering and being treated medically, they will not be receiving their salaries. PIP insurance will even pay the injured any wages that they have lost due to a car collision.

In the 12 no fault states listed above, PIP insurance is required. People living in those states will find out what other types of insurance they are required to have when they inquire about the state’s minimum requirements; some states mandate that their drivers also have uninsured and underinsured motorist coverage, too. To continue using the example of Utah, this state obligates their drivers to have a no fault policy that will pay for their own injuries and property damages, but it will not necessarily be enough.

Drivers have the ability to choose the amount of coverage they purchase based upon what they can afford; the more coverage that people purchase (i.e. comprehensive car insurance), the more it will cost them in premiums. Insurance premiums are the amount of money that auto insurance companies charge their clients to keep a policy active. These premiums can be charged by the month or twice a year, and those who want to keep their expenses down may choose to keep their coverage at a minimum level.

No Fault Car Insurance Claims for Damages

In the event that policyholders do not have enough PIP insurance to cover all of their medical expenses and property damage, no fault states give them the ability to sue the other driver who was found to be at fault. For this reason, no state has a completely no fault system. Also for this reason, drivers need to make sure to have their liability policies in place even though they live in no fault states.

Those who need to purchase PIP insurance may seek several different quotes from many different auto insurance companies, because the rates charged can be very different from company to company. They will also differ from person to person. The key is to choose the auto insurance company that offers the most coverage for the lowest price. In order to determine which company does this, insurance seekers need to make sure to give the exact same information and request exactly the same amount of coverage from each insurance company. When this is done, it will make choosing an insurance company much easier, because it is not worth it to pay more for the same amount of coverage.

The 12 no fault states require drivers to have Personal Injury Protection insurance that covers their own expenses. Purchasing this coverage, along with liability coverage, will be enough to ensure that drivers are complying with their state’s rules and regulations.

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