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No-Fault Insurance Explained
By: Tom McKnight
If you’re fortunate, or depending on how you look at it, unfortunate to live in
one of the twelve states that are under a non-fault auto insurance system, you
can cause an accident, yet your insurance company won’t pay for the other
parties’ damages.
If you live in a No-fault state (DC, FL, HI, KS, KY, MA, MI, MN, NJ, NY, ND, PA,
UT) that means you live in a state that both requires drivers to carry insurance
for their own protection and places limitations on their ability to sue other
drivers for damages. Your auto insurance company will pay for your damages (up
to your policy limits), regardless of who was at fault for the accident. Any
other drivers involved will be covered by their auto insurance policies. Since
all are required to carry insurance, in theory, there should be no uninsured
motorists in those states. Stop laughing; the term “in theory” was used!
These states opted for the no fault insurance system because it guarantees every
driver immediate medical treatment in the event of an accident. Further, it's
intended to reduce the legal and administrative fees associated with insurance
claims. Again, in theory, this should equate to lower premiums. Unfortunately,
often times the liability issues that still remain will actually drive premium
costs up.
However, because no state is pure no fault, drivers can always be held
financially responsible for the cost of injuries they cause in certain
circumstances – that’s the loop hole. Some states allow injured parties to sue
if their injuries meet certain standard for severity, while others allow it when
total costs reach a certain dollar level.
Below is a classic case of a no-fault situation. Neighbor lived in a four-plex
apartment building. It had a 4-stall garage along with a 4-stall wide driveway.
Because the driveway was so wide it was second nature for the tenants to pull
out of their parking spots and turn around in the driveway instead of backing
into the street.
One Sunday afternoon, one of the tenants decided to go visit a friend. She got
into her car and began backing out of the driveway in her normal manner. When
all of a sudden she felt a bump and heard a scream. At first she thought she ran
over her cat who would occasionally escape. She opened her car door and found
half of a body. Scared half out of her mind, she shut the car off and ran into
the house and immediately called 911.
The driver was too scared to go outside at that point. As far as she knew, the
half body, belonging to one of her neighbors, was still under the car and the
driver was certain the injuries were serious. Her left rear wheel had crossed
her body from her thigh on one side on the diagonal to above her pelvic region.
The driver later learned that some strong man from across the street came over
and picked up the car so she could get out from underneath.
The neighbor announced that she was feeling fine and didn’t want to go to the
hospital. But the police and ambulance didn’t feel the same way so they took her
the four blocks to the hospital. Turns out the neighbor was sunbathing behind
her car and somehow the driver didn’t see her when she walked to her car. She
ended up with no broken bones, no internal injuries; just a tire track from her
right thigh across to her left stomach.
The driver felt absolutely terrible, accepted full responsibility, wanted to do
everything and more to make it up to her. The next day, the driver phoned the
insurance company to explain to them what had happened. They asked her two
questions. #1 Does she drive? (yes) and #2 Does she own a car? (yes). The
insurance company informed the driver that due to No Fault insurance the
neighbor’s own car insurance would have to cover the medical costs. The driver
was clearly at fault, yet the driver’s insurance wouldn’t cover the damages even
though it was her fault.
The driver went as far as to tell the neighbor to sue her since it was her fault
and she felt totally responsible. The neighbor merely responded, “It was just an
accident.” The lesson here - next time lay on the grass, instead of the drive
way to sunbathe and risk the doggy doo.
Interesting No-Fault system, wouldn’t you say?
About the Author:
Tom McKnight is a freelance author and Corvette enthusiast who writes articles
for http://www.Corvette-Shopper.net
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