What is No-Fault Insurance and How Does it Work?
Written by AskTheLawyers.com™ on behalf of Jan V. Hinson with Tilton & Tilton LLP.
No-fault insurance may also be referred to as Personal Injury Protection or PIP insurance. This is an insurance policy that can help pay for your medical expenses as well as your passengers’ in the event of a motor vehicle accident. Depending on your state, no-fault insurance may be mandatory, whereas in other states it can be waived.
However, car accident attorneys typically recommend purchasing as much no-fault or PIP insurance as you can afford, as this will be your financial protection in the event of a serious motor vehicle injury. For example, if you are injured in a hit-and-run or in an accident where the other driver does not have sufficient insurance, no-fault insurance can help pay for medical bills, lost wages, and even funeral expenses in the event of a fatal injury.
No-fault insurance covers the person, not the vehicle.
Unlike other car insurance policies like liability or comprehensive, no-fault insurance focuses on protection for the driver and any passengers who may be riding in the vehicle. This policy ensures that no matter who is at fault for the accident and regardless of the other party’s insurance policy or lack thereof, some sort of money will be available to pay emergency expenses such as hospital costs and income loss during treatment and recovery. However, no-fault insurance cannot be applied to expenses incurred by damage to the vehicle, nor does it cover theft of items inside the vehicle.
Relying on the other driver’s insurance policy is often insufficient, and with no-fault insurance, you don’t have to.
Unfortunately, medical bills tend to be more expensive than predicted, and discovering that the at-fault driver’s insurance is insufficient to pay your damages is a common problem. Drivers with no-fault insurance don’t have to rely on the other party’s insurance or the possibility of a successful car accident claim as their only means of recovery. In many cases, if a driver did not purchase insurance, they likely don’t have the necessary assets to compensate for your damages even in a successful lawsuit. No-fault insurance policies provide a level of financial protection that many car accident experts consider essential.
With any insurance policy, it’s a good idea to be cautious.
A driver can have all the best and most-recommended insurance policies, but if the insurance provider conducts itself unscrupulously, their policies won’t do them much good. Insurance bad faith is a term used when an insurance provider denies or reduces an otherwise valid claim in the interest of increasing their own profit. Delays in payment, misinterpretations of policy language, and failure to conduct a thorough investigation are all signs that insurance bad faith may be at play. If you suspect an insurance provider is not dealing fairly with you regarding an accident claim, it’s a good idea to talk to an insurance bad faith attorney. In these circumstances, an insurance bad faith attorney knows how to hold the insurance provider accountable and make sure the injured party receives the full extent of the compensation their policies entitle them to.
To learn more about no-fault or PIP insurance, or for help applying these policies after a car accident, reach out to a car accident attorney in your area.