Lots of drivers have questions about no-fault car insurance. What is it? How does it work? If no one is at fault, how can anyone be responsible for paying for repairs or medical bills? Who actually pays claims?
The system isn’t all that difficult to understand. Here’s what you should know.
Some Car Insurance Facts
Almost all states require that drivers have insurance coverage before they’re allowed to operate a vehicle. (New Hampshire and Virginia don’t, but they still hold drivers responsible for any damage they cause.)
There’s very good reason for this: After more than a century of experience with cars on the road, society has learned that the potential (and actual) damage drivers can do is too serious to let them roam around with no controls.
Just like having a license and making sure your vehicle is registered and meets safety and pollution requirements, insurance is part of the price of admission for the privilege of being able to drive.
Tort or Fault Insurance
Traditional insurance provides coverage for damage and injury, but nothing is automatic. Under this “at-fault” system (also called a tort system), the insurance companies for the parties involved usually try to work things out, but if there’s a disagreement, they may wind up in court, where a trial will determine who was responsible for the crash, to what degree, and how much they will pay in damages.
No Fault: Who Insures Who?
Unlike in a tort system, a no-fault insurance system pays many claims automatically (assuming they’re covered and deductibles are met). An insurer might require the policyholder to use certain shops for repairs or certain sources for parts, and the insured’s rates might go up after a claim, but there usually isn’t any negotiating between insurance companies, and the driver making the claim doesn’t have to resort to a lawsuit.
The reason for this is that, with no-fault insurance, you are essentially paying your own claim after a crash. As long as you have the proper amount of coverage, your own insurance company pays your claim, regardless of who caused the accident. New York’s no-fault system even has mechanisms to make sure that those injured by uninsured motorists and those with no vehicles to insure (pedestrians or cyclists who don’t own cars) receive compensation when necessary.
The Limits of No-Fault
No-fault insurance systems are touted for their benefits, which include reducing legal fees and speeding up the time it takes to pay claims. But no-fault systems have their drawbacks. Some feel that the system can protect bad drivers because they’re not held responsible for the damage they cause.
No-fault insurance rates are often believed to be higher than a tort system in the same area would be, although it’s difficult to say if this is true.
And no-fault doesn’t protect against every situation. When a crash is caused by negligence, a traditional lawsuit can still be filed. Even when no-fault does cover damages, the amount is limited by various means in most of the states with no-fault systems.
In New York, when a crash causes a serious injury (as defined by Section 5012(d) of state law), a victim can choose to pursue additional legal action to make sure that a sufficient amount of compensation is paid.
New York Car Accident Lawyer
No-fault insurance is good at covering the basics, but when you’ve been seriously injured in a car crash, it may not be enough. That’s when you need to turn to an attorney with car accident law experience. Contact Greenstein & Milbauer, LLP today. Find out how we can help by calling 1-800-VICTIM2 (842-8462) or filling out the form below.