If you own a vehicle, you open yourself to a whole new world of risks. These risks could be financial. It means that you put yourself at the risk of losing lot of money. A good example is the liability insurance where state law dictates you to pay for the damages caused to the other party in an accident where you are declared at fault. You might get away with just the damage repairs of the vehicle. If you are not so lucky, the costs might just shoot when you have to bear the hospitalization charges of the other party. There is another problem where if your deductible is high, the end amount you might need to pay is high too, which is the risky bit of going for lower premiums.
Auto insurance is also required for your own safety where in accidents where you are not at fault, you will get coverage from your insurance which will get it reimbursed from the other party’s insurance company.
The problem with general auto insurance
Whoever is at fault in the accident, there are always the costs of damage repairs and sometimes hospitalization charges. Once in a while, the guilty party has to pay for the loss of compensation for the person who cannot go to work because of the accident. All these cases, however, critically hinge on the court’s judgment on who is guilty. Sometimes, there is the reputation at stake and lawyers and insurance companies get the two parties to go for an out of court settlement which is faster and less expensive. However, sometimes both parties are stubborn in which scenario the case might drag for quite a while. So the costs have to be borne but it is not clear who will bear the charges.
No Fault Insurance Policy
There are some states which have now allowed people to go for what is known as a no fault insurance policy. At the heart of it, this policy has a very simple concept. It takes the matter of insurance at its core and shows why people go for insurance after all. It is obviously for security which means they shouldn’t be subjected to court anxiety or legal cases that drag on for a while. In no fault insurance, the insurance company will pay for the coverage of your damage repairs and hospitalization charges in all cases, irrespective of whether you are at fault or not. Other coverage you receive depends on the terms of the policy.
Benefits of No Fault Insurance
The biggest benefit of this kind of insurance policy is of course its straightforwardness. When a customer is paying the premium, he or she knows that they would be the recipients of the coverage later on. They don’t have to worry about fighting cases and deciding who is at fault in a collision or an accident. When there is an accident, there is enough tension, strain and loss which a person has to go to and adding the insurance fight is another problem added to the list. In no fault insurance, one can breathe easy that the costs will be borne by the insurance company in spite of one’s fault so that one can avoid the lengthy, tedious process of trying to find out who was at fault in the accident.