What is “No fault” Insurance?
A note on Michigan “No Fault” Auto Insurance: It had to be sold politically so a lot of effort went into demonizing the legal profession along with those who were either underinsured or non-insured, and when it went into effect in 1973 It featured Mandatory Participation, resulting in a higher margin for the underwriters, which was supposed to (theoretically) lower premiums. A Liability Limitation was also supposed to do the same, but in fact in resulted in the exact opposite: Michigan has the highest auto insurance rates in the country. When the Michigan Insurance Industry lobbied long and hard for “no fault”, it sure wasn’t for the benefit of the auto owner. Also, the state stepped in to play the citizens advocate role by supposedly acting as a watchdog over the industry, so of course the employment opportunities at the Michigan State Insurance Commission rose significantly. In short, the “no fault” law in Michigan really should have been called The Michigan Public Employee and Auto
No-fault insurance in N.Y. means that the insurance carrier for your vehicle, rather than the insurance carrier for the other vehicle, pays your medical bills or lost wages. This is true regardless of who was at fault in causing the accident. However, no-fault does not apply to property damage claims which are usually paid for by the insurance carrier for the vehicle that caused the collision or by your carrier if you carried collision coverage. Also, no-fault does NOT apply to motorcycles so please refer to the motorcycle FAQ’s to see how motorcyclists are treated different.
Its a type of insurance by which the victims of an auto accident are compensated by their own insurance company, no matter who caused the accident. This outcome is different from what occurs under the traditional tort system of compensating victims of an accident. In the tort system, the party who is at fault is required to compensate the victims of the accident. The idea behind no-fault insurance is to keep small claims from being settled in our expensive legal system. To accomplish its purpose, no-fault insurance restricts the injured person’s right to sue the negligent driver in those instances where the loss falls below a certain threshold. Two types of thresholds are typically used: verbal thresholds and dollar thresholds. A dollar threshold proscribes a dollar limit that a claim must reach before the injured person regains his or her tort rights (the ability to sue). A verbal threshold uses a written description to determine when the injured person regains his or her right to sue
A. Maryland and Virginia do not have “no-fault” insurance. Those states that do have different variations of “no-fault” insurance require minimum coverages to pay anyone who was injured while in a vehicle involved in a collision. The key feature of a no-fault law is the guarantee of being paid by your own insurance company for a variety of limited losses, whether or not you were at fault, in exchange for giving up your right to make a claim against the other driver. No fault laws are designed to limit your recovery. Fortunately, no such limits have been enacted in Maryland or Virginia.
Related Questions
- I currently have a job and insurance for myself and my son, but after 3 months of my maternity leave if I decide to resign my job, will I be able to get FAMIS for myself and my two sons including my husband who has Obama care?
- I want to renew car insurance policy. So How can i get Premium, IDV and cashless facility?
- What is OOP with regards to insurance?
