Your ultimate insurance guide


No-Fault Insurance Explained

If youre fortunate, or depending on how youdecided to go visit a friend. She got into
look at it, unfortunate to live in one of theher car and began backing out of the driveway
twelve states that are under a non-fault autoin her normal manner. When all of a sudden
insurance system, you can cause an accident,she felt a bump and heard a scream. At first
yet your insurance company wont pay for theshe thought she ran over her cat who would
other  parties  damages.occasionally escape. She opened her car door
and found half of a body. Scared half out of
If you live in a No-fault state (DC, FL, HI,her mind, she shut the car off and ran into
KS, KY, MA, MI, MN, NJ, NY, ND, PA, UT) thatthe  house  and  immediately  called  911.
means you live in a state that both requires
drivers to carry insurance for their ownThe driver was too scared to go outside at
protection and places limitations on theirthat point. As far as she knew, the half
ability to sue other drivers for damages.body, belonging to one of her neighbors, was
Your auto insurance company will pay for yourstill under the car and the driver was
damages (up to your policy limits),certain the injuries were serious. Her left
regardless of who was at fault for therear wheel had crossed her body from her
accident. Any other drivers involved will bethigh on one side on the diagonal to above
covered by their auto insurance policies.her pelvic region. The driver later learned
Since all are required to carry insurance, inthat some strong man from across the street
theory, there should be no uninsuredcame over and picked up the car so she could
motorists in those states. Stop laughing; theget  out  from  underneath.
term  in  theory  was  used!
The neighbor announced that she was feeling
These states opted for the no fault insurancefine and didnt want to go to the hospital.
system because it guarantees every driverBut the police and ambulance didnt feel the
immediate medical treatment in the event ofsame way so they took her the four blocks to
an accident. Further, it's intended to reducethe hospital. Turns out the neighbor was
the legal and administrative fees associatedsunbathing behind her car and somehow the
with insurance claims. Again, in theory, thisdriver didnt see her when she walked to her
should equate to lower premiums.car. She ended up with no broken bones, no
Unfortunately, often times the liabilityinternal injuries; just a tire track from her
issues that still remain will actually driveright  thigh  across  to  her  left  stomach.
premium  costs  up.
The driver felt absolutely terrible, accepted
However, because no state is pure no fault,full responsibility, wanted to do everything
drivers can always be held financiallyand more to make it up to her. The next day,
responsible for the cost of injuries theythe driver phoned the insurance company to
cause in certain circumstances thats theexplain to them what had happened. They asked
loop hole. Some states allow injured partiesher two questions. #1 Does she drive? (yes)
to sue if their injuries meet certainand #2 Does she own a car? (yes). The
standard for severity, while others allow itinsurance company informed the driver that
when total costs reach a certain dollardue to No Fault insurance the neighbors own
level.car insurance would have to cover the medical
costs. The driver was clearly at fault, yet
Below is a classic case of a no-faultthe drivers insurance wouldnt cover the
situation. Neighbor lived in a four-plexdamages  even  though  it  was  her  fault.
apartment building. It had a 4-stall garage
along with a 4-stall wide driveway. BecauseThe driver went as far as to tell the
the driveway was so wide it was second natureneighbor to sue her since it was her fault
for the tenants to pull out of their parkingand she felt totally responsible. The
spots and turn around in the driveway insteadneighbor merely responded, It was just an
of  backing  into  the  street.accident. The lesson here - next time lay on
the grass, instead of the drive way to
One Sunday afternoon, one of the tenantssunbathe and risk the doggy doo.



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