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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.
In a no fault state, the law states that drivers must
have insurance for their own protection, regardless of
who causes an accident. Your company would pay for the
damages you suffer regardless of fault, and the other
driver's insurance company would pay for their loss.
The theory is that since we all agree to be responsible
for ourselves that there will be no uninsured motorists
in these states. Well, interesting "theory".
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.
However, because no state is pure no fault, drivers can
always be held financially responsible for the cost of
injuries they cause in certain circumstances - that~s
the loop hole. Some states allow injured parties to sue
if their injuries meet certain standard for severity,
while others allow it when total costs reach a certain
dollar level.
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.
While in her apartment, a neighbor from across the
street, having seen the accident, ran over and was able
to move the car enough to allow the victim to crawl out
from underneath. The driver was convinced that she had
caused her neighbor some serious injuries.
Fortunately, however, the victim was not injured and
insisted to the police and ambulance that she did not
want to go to the hospital. They insisted, however and
she agreed to go. Fortunately there were no broken
bones or internal injuries. Apparantly she had been
sunbathing in the driveway and was out of sight of the
driver.
The driver felt responsible and terrible and wanted to
help her neighbor by making it up to her. So she
her insurance company to report what happened. Her
insurance company, while toalking to the lady, learned
that the victim had her own insurance and car. Since
they were in a no fault state, the driver was told that
the victims own insurance would have to cover any
claims, regardless of who cause the accident.
Do you still think no fault insurance is the way to go?
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