No-Fault Auto Insurance

Despite seeming complicated, no-fault auto insurance is a common policy that in its simplest sense means that their insurance company, regardless of who was to blame for the damage, protects a person holding this type of policy against financial losses. Even though it is called “no-fault insurance” it does matter who was to blame for the accident, it is just repaid in a different way.

This type of insurance was initially added as a method of lowering cost of premiums by avoiding drawn out court cases and massive lawyers fees while being able to hand out quick payments for injuries.

How no-fault auto insurance works is that the person who was injured in the accident, the victim, would be reimbursed by his or her own insurance company immediately. This provides them with money to cover their costs and takes a huge burden off of their life if they require taking time off of work, or recovering from injury. The person at fault for the accident (after paying off the victims, the insurance companies would then meet to find out which party was at fault) would have his insurance pay back the victims company. The driver at fault repays by being forced to pay higher premiums.

In a simple sense, all that no-fault auto insurance really means that you get to deal with your own insurance company, regardless of who is at fault. This is obviously a major benefit, as it expedites the litigation between the parties, putting it in the hands of much more experienced and efficient professionals who will sort it out as quickly as possible. In a similar manner, policyholders don’t need to spend time contacting another company, or trying to get in touch with unfamiliar people.

One negative of no fault auto insurance is the fact that both parties’ car insurance companies will be working to find who is at fault. If you are found at fault, your premiums will be raised to compensate the company for the money they now need to pay out to cover the victim’s expense.

Luckily, claims adjusters are made available in cases like this, and you can easily ask them questions such as what kind of fault determination had been applied in your case. You can also bring any new information to your insurance company in case it might be able to swing blame from you, to the other driver. If both you and the other driver swore the other had missed a stop sign, the company has little options but to assign 50/50 fault to each driver. If you found an eyewitness, you could present their testimony to you claims adjuster, and prove you were not at fault.

No-fault auto insurance is something that you should think over before you purchase it. Although it can expedite claims and protect you financially if you can’t work, you may also end up paying higher premiums, and getting stuck in a long-term contract of high fees. Typically, this will not occur, and no fault insurance is a great option for people to quickly settle disputes and receive immediate compensation.