The no fault auto insurance plan is used by a mere 13 US states. A foundation based on fault is used by the other states. This is how insurers settle on when and how much they will pay out. Measuring fault is the basis for each case.
The problem with this traditional rationale is that it can take up a lot of time and money. And it overworks a court system that is extremely overloaded already. The 13 states that make use of the no-fault insurance are Colorado, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.
With no-fault, your insurance company pays no matter who is at fault. Coverage is provided for the plans limit. You would sacrifice any privileges to bring a claim to any other drivers that may have been caught up in the accident.
Regardless of who is at fault, medical and property expenses are covered. The intentions behind this kind of insurance are to keep these cases out of court. Caps are placed on pain and suffering but other losses are covered.
There are actually two different types of no-fault insurance. Pure no fault will pay for medical and wage loss up to your policy limit. However, the other costs you would not be allowed to sue for. None of the US states use this system. Pure no fault is essentially out dated.
States use what is called modified no fault now. Your insurance company covers lost wages and damages but in certain instances you would be allowed to sue. If damages surpass a specific amount then it would be possible to recoup losses. The amount of cases allowed to approach the bench would be restricted to serious only.
This plan offers advantages. Claims are processed quicker and eliminating attorneys keeps prices for insurance down. The courts benefit by a reduction in court cases.
Because all drivers are treated equally, many would prefer to use a different system. Many also feel that people are not rewarded fairly for pain and suffering. There are pros and cons with either plan.
