What is “No fault” Insurance?
Michigan no-fault insurance provides unlimited medical and rehabilitation benefits. No-Fault Insurance is required by law in Michigan. No Fault Insurance has three parts. LIABILITY – Provides coverage for bodily injury or property damage of others for which an insured is legally responsible because of an auto accident. PERSONAL INJURY PROTECTION – Provides the insured unlimited lifetime medical expenses for any claim which would be covered by No Fault. Loss wages are payable for 3 years from the date of the accident. PROPERTY PROTECTION – No-fault will pay up to $1 million for damage your car does in Michigan to other people’s property.
A. With no-fault insurance, the victims of an car accident are compensated by their own car insurance company, regardless of 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 prescribes a dollar limit that a claim must reach before the injured party regains his or her tort rights, and therefore the ability to sue. A verbal threshold uses a written description to determine when the injured person regains his or he
It’s 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 an 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 instance 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.
In states with no-fault insurance, victims of automobile accidents are compensated by their own insurance company, regardless of who caused the accident. No attempt is made to determine fault. This is different from the traditional insurance coverage where the party at fault is primarily responsible for paying the costs of an accident, either individually or through his or her insurance company. In certain circumstances, though, victims can sue the other party; the limitations vary among no-fault states.
In general, the premise behind no-fault insurance maintains that automobile accident victims have the right to be directly and promptly reimbursed for medical and hospital expenses and loss of income by their own insurance company, regardless of who was at fault in an accident. The term is often used to apply only to accidents under a state no-fault law that requires insurance companies to pay policyholders regardless of fault and restricts the ability of accident victims to sue others for their injuries. A number of questions often arise concerning no-fault coverage, including whether or not a motorist has the right to sue for additional money in the case of a particularly serious injury, and whether or not drivers who live in a state that does not have a no-fault law need to purchase special coverage to travel through a no-fault state. Your insurance agent is your best source for answers to such questions.
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