There are twelve states in the United States which have No-Fault Insurance programs, including New York, Florida and Pennsylvania. No fault automobile insurance is also available in Washington, D.C. In the event of an accident caused by you, No-fault insurance coverage extends to your car only and not the other party. The main reason for no-fault automobile insurance is to decrease lawsuits following traffic accidents.
Settlements obtained in a lawsuit are limited by No-fault insurance policies. Respective insurance companies are expected to pay for the damages to their policyholders involved in accidents, whether at fault or not.
No Fault insurance is offered for two primary reasons. They ensure that all drivers have access to medical care for injuries resulting from an accident, without questions. They also are aimed at decreasing subsequent lawsuits.
The other reason is to limit the amount of lawsuits that are filed for traffic accidents. Everyone will be deemed to be not at fault, no matter who causes the accident.
In some cases, the cost of no-fault insurance raises the amount of insurance premiums for all policyholders because the insurance companies have to pay out, whether or not their insured was at fault. This type of insurance punishes safe drivers who maintain a good driving record while rewarding those drivers with poor driving safety records. Comparison-shopping in the states where no-fault automobile insurance is available can ensure the lowest possible insurance policy premiums.
No fault insurance requires that each driver involved in the accident file a claim through their own insurance company and eliminates the use of unnecessary tests. Many drivers involved in accidents go to chiropractors for many years following an accident in hopes of obtaining a significant settlement in a lawsuit. No fault insurance eliminates abuse of the medical and legal systems and allows those who need treatment to seek medical attention.
No Fault insurance has positive and negative benefits. No fault insurance lacks incentives for safe drivers and does not offer safe driver discount programs to reduce premiums.
However, it does manage to cut down on frivolous lawsuits and unnecessary medical costs and insures that anyone in an accident can receive the medical attention they need.