Horns blaring, tires skidding, brakes screeching, followed by a thud and crash…no, there is nothing quite like being in an auto accident-except, perhaps, dealing with the auto insurance providers in the aftermath. This may be because determining which driver is responsible, how much financial reimbursement is due from auto insurance providers and expectations of the involved parties can cause as much pain as the accident itself. Consequently, 22 of 50 states have opted for no fault auto insurance-a.k.a. personal injury protection (PIP). The premise of no fault auto insurance is that costs are lower since each person pays, regardless of who is at fault. States that have no fault auto insurance are:
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Advantages of No Fault Auto Insurance
No fault auto insurance does have its advantages. In fact, there are several more pros than cons in no fault auto insurance over fault insurance. These no fault auto insurance advantages are:
- With no fault auto insurance, you are guaranteed to receive money and that you will receive it more quickly since you deal with your own auto insurance provider.
- No fault auto insurance means you have a lower medical expense deductible, so your medical bills are paid faster.
- Your lost wages are covered. This amount varies from state to state for those with no fault auto insurance.
- With no fault auto insurance, you do not need to prove who was at fault for the accident; nor can you be sued if you are the guilty party.
- In most cases, there are no auto insurance claim forms to fill out –unless you need to seek additional money.
- You do not need to hire a personal injury lawyer with no fault car insurance.
- With no fault auto insurance, your property damage is not covered and you will not receive anything for it unless you file a claim. This can be a tedious, time consuming and ultimately costly process.
- No fault car insurance sets a specific amount of what will be spent on medical bills. If your costs exceed the amount set by your no fault auto insurance provider/state, then you may file a claim.
- No fault auto insurance does not compensate for any pain and suffering due to the auto accident. Rather, you must file an injury threshold claim (big surprise-another tiresome claim form!) However, this is extremely subjective, with each state having its own standard of what is considered extreme pain.
Disadvantages of No Fault Car Insurance
Succinctly put, no fault car insurance may lack when it comes to providing you with what is needed, precisely when you need it most.
While no fault auto insurance does have its advantages, there are also reasons that it is not the ideal solution. So if you are considering a move to a state where no fault auto insurance is the norm, be sure to keep this information in mind as you consider your budgeting needs.
