How Does No-Fault Insurance Work?
Outline of Coverage No-fault insurance is similar to first-party coverage in that, when an automobile accident occurs, no party is “at fault,” meaning that each party’s insurance is responsible for the damages he incurs to himself. The intention of no-fault coverage is to lower costs by keeping small claims out of courts. Insured Ability to Sue In the strictest of forms, no-fault insurance takes away a party’s ability to sue for damages when receiving first-party payments. However, in severe instances, parties can sue for damages when significant body damage or death occur. Payment No-fault insurance is responsible for paying both medical and vehicle damages. This form of insurance also requires payment of damages even when the insured does not want payment to avoid rate increases. This is the case because no-fault insurance is primary, meaning the insurance company pays medical companies and auto shops directly.
Many people misunderstand no-fault law. “No-fault” auto insurance applies only to personal injuries. It does not apply to physical damage to your vehicle. It is designed to make your own insurance company pay your medical expenses, lost income, and value of replacement services that others must do for you because of your injury. These expenses are paid regardless of who was at fault in causing the car accident. No-fault insurance is required by law on all cars driven principally in Minnesota and North Dakota, but it is not required, or even available, in Wisconsin. The advantage of having no-fault insurance is that medical bills, wage loss and replacement services can be paid to you within 30 days of the claim, without waiting to settle your case against the other driver.
