Because there’s a lot of car and injury protection insurance available in the market, most people get confused about what they need and what insurance to get. Some people even enroll themselves in no-fault insurance, when they don’t know what exactly it is and how it works. As a result, they get surprised when required to file a claim with their no-fault insurance policy, once they get involved in a car accident.
If you’re considering getting a no-fault policy, then you came to the right place. You might want to read this article, to identify what it covers and how it works. You’ll be empowered on the basics and the essentials of everything you need to know about it.
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What Is A No-Fault Insurance Policy
Before the availability of the no-fault policy, insurance policies would usually identify who among the two persons involved in a car accident is at fault. Once identified, the innocent driver can file a claim against the at-fault driver’s insurance for any damage and injuries caused by the accident.
Although state laws may vary, this process would generally take too long, that the insured is forced to shoulder all bills and wait for the reimbursement after. No-fault insurance policies help the insured on this aspect and eliminate the need to wait for the long reimbursement process that other types of insurance offer.
No-fault or Personal Injury Protective (PIP) coverage is a type of insurance that can cover you and your passengers when an accident happens, regardless if you’re at fault or not. As long as the accident is covered by the policy, you’re assured that all liabilities are covered by your insurance company. There are specific states that require every driver to get no-fault policies. Other states don’t stipulate it as a requirement but are still made available on an optional basis.
What Does No-Fault Insurance Cover
No-fault benefit coverage varies, depending on the state. The list below shows the most common benefits covered by a no-fault insurance policy.
No-fault policies cover hospital and medical expenses. These might include ambulance costs, necessary surgical procedures, laboratories, physical and occupational therapy, and other related expenses.
2. Lost Wages
Not being able to work is also one of the worst things that can happen to a car collision victim. If the injury caused is so severe, this might prevent the insured or any of their passengers from going to work. A no-fault policy will pay a percentage of the claimant’s lost wages. Again, depending on the state, the computation of percentages may vary.
3. Funeral Expenses
If the driver or any of their passenger wound up dead as a result of the accident, no-fault will cover all funeral expenses.
4. Other Essential Expenses
No-fault insurance policies might also cover essential expenses, such as fees for cleaning the house, child care, and the payment for household help that the claimant might need while undergoing treatment after the accident.
How Does A No-Fault Insurance Policy Work
Most people think that no-fault insurance policies are leaning toward the protection of reckless drivers. The party who’s not responsible for the accident can’t file any lawsuit against the driver at fault, as there’s a no-fault insurance policy that will cover the latter’s liabilities. The at-fault driver will only face an insurance rate increase as a sort of penalty for the additional expenses resulting from the accident.
There are only two instances that the insured’s party can be allowed to file a personal injury lawsuit against the at-fault driver. The first is when their medical expenses reach or exceed a specific threshold determined by state laws. The other circumstance is when the injuries are so severe or permanent, that these will lead to the loss of livelihood for the innocent driver.
What To Remember About No-Fault Insurance Policies
No-fault insurance policies only cover car accidents, injuries, and other expenses that a person receives as a result of the accident. If your car got damaged during the accident, no-fault insurance will not cover its repair cost. What you can do, instead, is to file a claim against the at-fault driver.
The coverage of no-fault insurance that was provided above is just an overview of what it normally includes. Because each state has its guidelines on insurance policies, it will be best to contact an insurance agent to get the exact coverage information you might need if you’re interested to get one.
Just like other insurance policies, no-fault insurance has its pros and cons. Its strengths lie in its ability to make the processing of claims shorter compared with other types of insurance. Additionally, it allows the coverage of medical expenses, lost wages, funeral expenses, and more.
There’s so much more to learn once you start driving a car. Aside from the different safety measures to take on the road, getting yourself educated on insurance-related matters might be helpful in the long haul.