No fault auto insurance isn’t really as cut and dried as its name would lead your to believe.
True…
it does sound simple enough. You pay for your car insurance premium and when something goes wrong; your insurance company pays you after the deductible is met by you.
However, as you can imagine, each state is going to have some differences and nuances on how they define and legally interpret their no fault auto insurance statutes. So, you’re best off to bring yourself a bit up to speed on your local no fault laws as they pertain to your own insurance coverage.
With car insurance most states fall into three basic categories. They are no fault, tort, or some sort of no fault option or inclusion. Your comprehensive and collision coverage (physical damage to the car) the systems essentially work the same.
If you are in a no fault auto insurance state, and someone runs into you, your insurance company will pay to fix your car; then they have the option to try to recover from the other person’s insurance company if they determine that necessity.
In a tort state, you can have your insurance company pay to fix your car, or you can leave your company out of the loop and have the other driver’s insurance company handle the details.
This way you would not report the accident to your insurance company and thus save you out of pocket expenses of the deductible.
Obviously, in a tort system, you have to channel everything through the individual that was at fault. This, of course, puts you at the mercy of the other insurance company when it comes to receiving payment. This can be frustrating enough if there is only damage to your vehicle, but if there are physical injuries involved, this can become a whole other personal matter.
The best approach is to make sure that you have the proper car insurance coverages that meet your personal and financial needs and risks.
Be sure to discuss any limits and thresholds that your state has depending upon its insurance environment. It’s especially important to discuss and evaluate your insurance coverages as they pertain to you and/or your family’s financial situation. Particularly as your coverage pertains to personal injury protection because medical bills and subsequent law suits could wipe you out financially almost instantly.
And as always, remember to shop around for your coverages. You might be under the assumption that with all of the states insurance statutes whether they are a no fault auto insurance state or not, the costs of the coverages would be fairly standardized. This isn’t necessarily the case; in fact, there can be stark differences in price of coverages from company to company.
A little research and homework can save you good money.
