A couple of years ago almost every other person who was eligible for the no-fault auto insurance policy was looking out to buy one in order to keep the premiums minimal and reduce court fees. However, today, the no-fault auto insurance has no takers since it failed to live up to its goals and policy guidelines.
The no-fault insurance came into being in order to provide low cost car insurance to consumers by reducing the court fees. However, this backfired since the cost of the medical bills rose, thanks to this policy.
James Anderson, a researcher and lead author of RAND, a nonprofit organization, said that the no-fault auto insurance was the perfect example that portrayed the unintended consequences of law. A study by the organization, headed by James, put forth the data of the no-fault auto insurance policy in the United States. The report clearly showed that the victims of the accident ended up filing for claims from their auto insurance providers rather than that of the other driver.
The insurance analysts and policy makers, about three decades ago, felt that the conventional auto insurance policies can be easily displaced by the no-fault insurance policies and hence brought it into effect. But today this type of policy is at the lowest rung of the popularity list among consumers as well as insurance providers. Tort based policies are available in 29 states, out of which three states give the drivers an option to choose between limited tort insurance that has lesser costs and complete tort insurance which is very expensive.
There are three restrictions in any no-fault insurance. There is a restriction on suing the other driver and restrictions on getting payment for suffering and pain. Also, there is a mandate that states that the insurer of the victim will pay the medical costs.
When the policymakers came up with the concept of no-fault insurance, they thought that the administration costs and litigations costs could be kept minimal. They also felt that the victims would be fairly compensated and the premiums would be less. However, they were miles away from reality. The policies, unfortunately, did not offer low premiums and also the medical costs shot up.
The politicians too have backed away from supporting the no-fault auto insurance. The trial lawyers who opposed this type of insurance from the onset were able to figure out the dubious intentions of the auto insurance companies. With no support from any quarter, the no-fault insurance stands with no takers.
