The law is rarely straightforward and can have loopholes within its clauses. Legal procedures are a headache that only some wish to deal with.
Add a terrible accident to the mix, and it gets worse. The lawyer fee, property damage, medical bills, and other losses add to your misery.
These complexities multiply in a no-fault law state.
If you have been in a car accident and live in a no-fault law state, don’t worry! We have covered everything you need to know in this article.
What Are No-Fault States?
Unlike tort states that follow the traditional insurance system, drivers in no-fault states aren’t liable to cover the other party’s costs for property damage and medical expenses.
The only 12 states that uphold no-fault auto insurance regulations are Florida, Kansas, Hawaii, Massachusetts, Minnesota, Michigan, New Jersey, New York, North Dakota, Pennsylvania, Kentucky, and Utah.
Under no-fault states, you can’t sue the at-fault party for damages. The right to pursue damages for personal injuries is limited too. There are exceptions to these restrictions as well. Before knowing about them, let’s first understand the basics.
#1 No-fault auto-insurance policies
Legal concerns that arise after an automobile collision include identifying the responsible party, estimating the severity of any injuries and property damage, and figuring out the victim’s fair settlement. In a traditional legal system, claiming with the at-fault party’s insurance provider is the initial stage in the legal procedure. Documentation is another crucial step in recording any injuries, property damage, medical bills, and other costs associated with the accident. The insurance provider will look at the claim and decide who is liable. The victim will get compensation from the insurance company if it is determined that the other person was at fault for the accident.
This process is followed in traditional tort legal systems. The situation is different in no-fault legal systems. Drivers must submit claims to their providers if they are in an accident in states with no-fault insurance legislation. Because drivers in no-fault states are often required to acquire Personal Injury Protection coverage and liability insurance, these states are also known as PIP states. As a result, insurance premiums in no-fault jurisdictions are high. With an average cost of $4,333 annually for full coverage insurance, Michigan has the most expensive premiums. The minimum insurance requirements in some no-fault states for bodily injury are $25,000 (Kansas), $20,000 (Hawaii), and $15,000 (Pennsylvania). The no-fault insurance policy covers all the reimbursements for your medical costs, lost wages, and other additional expenditures linked to your injuries.
#2 Types of no-fault states
There are two types of no-fault states: choice no-fault states and add-on no-fault states.
Choice No-Fault jurisdictions let you opt between a no-fault coverage and a typical tort liability policy. While there are fewer limitations on your capacity to claim under a no-fault system, the standards for tort liability might differ. While Kentucky has just a monetary one, New Jersey and Pennsylvania only have verbal ones. While the at-fault motorist is responsible for paying for property damage in each of the three states, you can still submit claims for personal injury to your insurer.
The tort insurance system is used in add-on no-fault states. They are fundamentally at-fault states since the person who initiated the collision is responsible for the other party’s expenditures related to injuries and property damage. You do have the option to increase your policy’s PIP coverage, though. PIP offers security if the other driver’s insurance is insufficient to pay for your medical costs, even if it is unnecessary. Some add-on no-fault states are New Hampshire, Oregon, South Dakota, Texas, Virginia, and Washington.
Exceptions To The Restrictions
Legal restrictions in no-fault states may hold you back from claiming damages you suffered because of another person’s negligence. However, there are ways to counter these restrictions. You can sue the negligent party in these states under the circumstances of severe injuries. In such cases, you can file a personal injury lawsuit and be compensated for your pain, suffering, and other non-economic damages.
For instance, the “90/180-day” rule is followed in New York. You might be able to file a fault-based personal injury claim if your injury was so severe that it significantly reduced your quality of life for 90 out of the first 180 days after your collision. There is a significant likelihood that you are entitled to file even a fault-based vehicle accident injury case if your economic damages exceed $50,000 (ISC § 5102). Significant disfigurement, permanent limitation of a body organ or limb usage, and limitation of a bodily function are some factors under which you can file a lawsuit in New York.
Another exceptional circumstance is accidents with commercial vehicles like trucks. No-fault insurance applies when dealing with commercial drivers too. As in the case of an accident with a personal vehicle, you would claim with your insurance provider. Your personal injury protection (PIP) coverage would subsequently cover your medical costs. However, PIP insurance’s capacity to offer sufficient coverage may be constrained by the severity of such accidents.
No-fault states have a way out in such situations too.
In Michigan, if your PIP coverage is insufficient to meet your immediate or continuing medical requirements, and you sustain injuries that result in disfigurement or severe disability, you can sue the commercial driver. Remember that in such instances, you may file a case against the commercial vehicle driver, the employer, or any other accountable third party. Commercial vehicle accidents are more complicated due to the involvement of third parties like the employer who neglected the vehicle’s maintenance. Police reports and insurance investigations are required too. Because assessing liability might be complex, consult with an expert attorney who will look into your case and try to figure out who could have contributed to your injury.
Conclusion
No-fault state laws may seem unjust, but they keep citizens’ welfare in mind. Rather than getting frustrated with the legal proceedings and negotiations involved in a lawsuit, the focus is on letting the injured person recover without strain.
By eliminating small claims from the judicial system, the no-fault system attempts to lower the cost of motor insurance, according to the Insurance Information Institute. This system ensures that the insurance company reimburses its clients for minor injuries, regardless of who was liable for the accident. A no-fault legal system emerged to counter the numerous litigations and help victims be relieved from the pressure of proving the other driver’s liability.
As stated in the article, different no-fault insurance policies following states have set thresholds for the minimum amount of damages to sue the negligent party. Therefore, it is a misconception that these states don’t allow any scope for lawsuits.