Does no-fault car insurance stick to its name?


Auto insurance is a huge business these days. It not only has a lot of benefits, it is also the law to have insurance coverage in all states of the United States of America.

We shall now discuss no fault car insurance and its advantages and disadvantages.

In almost all insurance claims, the parties involved in the accident usually have to take the case to court in order to determine who was at fault. And then only the insurance company from the side of the person who was at fault ends up paying for both parties. This is actually a very good idea, given the fact that only the person at fault is penalized. Even though he does not pay the money directly, his or her premium will obviously go up and thus he or she will end up being penalized for their actions.

But the flipside of this is that almost always the case will end up being taken to court. No driver will say that he or she was at fault when they can easily fight it in court. And in the meantime, both the parties have to bear all the expenditure pertaining to their losses. And both the parties also have to pay for lawyers and other court fees. And thus in the end, even the party which was on the right side of the law ends up spending a substantial amount of money. And there is also the factor of mental agony which both the parties go through during litigation.

Hence no fault car insurance was formulated as a protection against such situations. This clause states that the insurance companies of each party will pay for the damages incurred by their customer. And there is no litigation involved to find out who was at fault. This is a very good idea given that the money is immediately available for both parties to cover for the damages sustained. They also do not need to spend on expensive court cases or lawyers. And they do not have to go through the tension of going to court and fighting it out. All the legal hassle is avoided.

But again the other side of the story is that both parties will end up paying more premiums to their respective insurance companies. And even if you are an extremely good driver, you might end up paying as much as a bad one if you are really unlucky. It all boils down to being at the wrong place at the wrong time! But this can be avoided by enrolling oneself to a defensive driving class where you can learn how to avoid accident prone situations.

But the good thing is that though almost all states have enacted the no fault clause, not one has pure-fault, which means that both the parties are prohibited from suing under any case. All states allow for litigation in cases where the offending party was extremely negligent or even deliberate in committing the offense. Michigan is the only state that comes close to a pure no fault policy. But even here, for major accidents litigation is encouraged in order to ensure fair judgment. And due to the increase in auto insurance scams, it is only right that all cases be investigated thoroughly.