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Fault vs. No Fault Systems of Car Insurance
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These two phrases are commonly heard when discussing car insurance. However, they actually have applications in two different aspects of insurance -- the types of policies available and the classifications of driving and related incidents that can impact your insurance costs.
Fault in Driving Accidents and Traffic Violations
When you are found to be “at fault” in an accident or traffic violation, this means that the insurance companies involved have placed blame for the situation on you. Naturally, if you get a ticket for speeding or other moving violations, you are believed to be responsible for he incident, and your insurance rates may go up accordingly. You can also be culpable in an accident if it is believed that your driving, failure to observe local laws, or other mistakes were the cause. Being at fault in an incident can cause points to be added to your driving record, indicating to insurance companies that you are a risk.
Fault and No Fault as Types of Car Insurance
In addition to being the designation assigned to car accidents and other driving mistakes, these phrases also refer to types of automotive insurance policies.
Currently, twelve states allow no fault car insurance. This type is, in brief, a policy that requires motorists to be insured and also puts a cap on the dollar amount for which they can sue other drivers. The states that are have systems that do not require a designation of responsibility in order to pay out on auto claims include Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Utah, and Washington D.C.
If you live in one of these states and are involved in an accident, your insurance company will pay for any damages to your vehicle whether or not you caused the accident. By the same token, the other drivers involved (if there are any) will have repairs covered by their own insurance companies.
Because no state has an exclusively fault-free system for car insurance, lawsuits to cover damages are allowed in some situations. Most of these policies allow drivers to sue if the injuries caused in the accident meet a certain level of severity or cause expenses exceeding a certain amount of money.
Some states, like Pennsylvania and Washington D.C. allow drivers to choose whether they would like to have insurance through the more common tort (or legal) system or through the faultless system. Though this type can be more a more costly policy to carry, it also offers complete protection from uninsured motorists, which can make it worthwhile to have. It also means that you do not have to wait for medical treatment to be approved by another driver’s insurance company before it can begin.
If you do live in a no fault state, take extra care to shop around and compare auto insurance quotes. Though these policies can be costly, there are plenty of good deals and savings to be had! |
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