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No Fault Insurance: A Case Study
by Ina Segurian
http://www.gapinsurances.com
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 willpay 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!
You see, the idea is that the no fault system
guarantees everyone will get immediate treatment in the
event of an accident. Also, it may reduce the legal
and other costs which come with claims against the
other driver. Again, the idea is this will result in
lower premiums but unfortunately the issues of
liability remain and can actually make premiums more
expensive.
No matter which state you're in, however, drivers can
and will be held responsible for injuries that they
cause...even in no fault states. Depending on the
state, drivers can be held liable for injuries if the
injuries are severe enough.
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.
On one occassion, a tenant was going on an errand and
began the usual process of pulling into the driveway to
turn around. She was surprised when she felt a bump.
When she got out to investigate, she found that she had
run over a neighbor who was still underneath her car.
Understandably upset, she ran into her apartment to
call EMS.
The driver paniced and stayed in her apartment, sure
that she had caused a neighbor serious injury. She
later learned that another neighbor came to the injured
person's rescue and picked up the car enough to allow
the victim to goe out from underneath the car.
The victim stated that she was fine and did not want to
go to the hospital. However the police and paramedics
insisted and wound up transporting her to the hospital.
It turns out that the "victim" was sunbathing behind
her car, out of sight of the driver. Fortunately, she
suffered no broken bones and no internal injuries. She
did, however, have a tire track from her right thigh
to her stomach.
Feeling guilty, the driver accepted full resopnsability
and wanted to do whatever was necessary to make it up
to her neighbor. So, she called her insuance company
to explain the situation. The insurance company wanted
the following information: does the victim drive and
does she have her own car. The answer to both
questions was "yes". The driver was then told that due
to the no fault insurance issue, the victims own car
insurance company would have to cover the victims
expenses, even though the driver was clearly at fault.
Do you still think no fault insurance is the way to go?
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