No fault insurance is a process of ensuring the financial security for injuries from any car accident. Drivers often does this to make the claiming compensation faster as it is controlled by the insurer company.
Car accidents and insurance companies are almost interdependent. If you are a car or motor driver, you must have car insurance coverage to help you in your difficult times of an accident.
Insurance companies offer different types of compensation policies, among which no fault is a notable one.
Many people face confusion regarding what does no fault insurance means and how to deal with it.
Here goes a detailed discussion on everything about no fault insurance that you should know.
What Is the Definition of No Fault Insurance?
No fault insurance is a kind of financial protection for the driver of a vehicle and his passengers for the loss they face in an accident, no matter who is at fault for the accident.
It is also known as PIP (personal injury protection) insurance and sometimes as first-party coverage.
In no-fault insurance, it is no longer a matter of concern is that who is responsible for causing the accident.
Instead, the main concern is how many losses someone has faced due to that accident.
No fault insurance policy typically covers compensation for the losses like- medical bills and all over treatment expenses, lost wages due to the incapability of joining into the work. Besides these, funeral costs if anyone is dead in the accident are also included on the list.
What Is A No-Fault Car Insurance Claim?
No fault car insurance claim can compensate for various losses in an accident from your own car insurance company.
If you face any car accident and get injured from it, you can claim your compensation through your car insurance company against the insurance coverage of the faulty driver.
But a notable fact is that no fault car insurance claim never compensates for your pain and suffering. They mainly cover your medical costs, lost incomes, and funeral cost.
Sometimes, it might also provide you reparations for your vehicle damages and out-of-pocket or collision deductible expenses as well.
In most of the states of the world, almost 18 states, no-fault insurance is compulsory for automobile drivers.
How to Deal with No Fault Insurance?
Among the no fault insurance provinces, if you belong to any one of the states, you must have a no fault-insurance policy by which you can claim your reparations after an accident.
According to the no-fault insurance in Canada, you can claim your medical bills and lost wages with the help of your own car insurance company after a car accident.
But in case your claim is larger than the insurance company’s coverage, you can file a personal injury lawsuit against the company of the faulty driver.
In a no fault auto insurance policy, the insurance company is bound to meet the car insurance liabilities.
If your claim supports their coverage policy, they will undoubtedly compensate you.
But if it exceeds, there might be some issues, such as if you claim $8,500 for your physical injuries in a car accident against the at-fault driver’s insurance company.
Still, the company coverage capability is only $5,000.
In that case, for getting the extra or remaining reparations, you have the option to file a lawsuit against the insurance company, especially in Canada.
Who’s at Fault: Fault Determination Rules
In case of collision coverage, the insurance companies generally determine the driver or drivers who are at fault by appointing their own adjusters.
So they can investigate the overall evidence of the collision that happened.
Every insurance company associated with a car accident will employ one separate adjuster to report the accident.
The adjusters visit the accidental spot, talk to the witnesses, collect necessary proofs and evidence, and report to the insurance company.
Reviewing all the acute details of the accident, the adjuster determines the responsible driver for the accident and mentions how much he is responsible for the accident in his report.
Thus, the insurance companies determine and define fault in an accident.
How Can Fault Determination Affect The Insurance Amount?
The fault determination process can affect your insurance amount a lot.
First of all, if you are proved as a no fault driver, meaning you are not at all responsible for the accident that happened, your insurance amount will increase a lot.
When you are not responsible for the accident but have faced several injuries and damages, you hold the right to get your compensation covering your total losses.
If the insurance company’s adjuster finds you partially responsible for the accident, there might be a decrease in your reparations.
In that case, the company will measure the seriousness and depth of your fault in the accident and decide your compensation accordingly.
And if you are at fault or found guilty for the accident, there might only be a tiny amount for your loss, nothing else.
Instead, your insurance company has to compensate the other driver who is not guilty at all.
Benefits of No-Fault Insurance
No fault insurance serves a lot of benefits for the car and motor drivers.
Whenever they face any accidents and losses, no-fault insurance provides them a warm shelter of financial expenses, a crying need.
Major benefits of having a no fault insurance policy are—
- It compensates for all the physical injuries that you have faced from an accident
- Costs of your vehicle damages
- Lost wages that you could not earn for the injury
- Collision deductible costs
- Post rehabilitation expenses
- Even you will get compensation although you are at fault in the accident. So no complete loss at all.
- It provides you your in-home expenses during your treatment period
- Funeral expenses in case you are dead
- Surviving costs to your family if you get died out of the accident.
Disadvantages of No Fault Insurance
Apart from the benefits, no-fault insurance contains some disadvantages too. For example—
- One of the most common disadvantages of no fault insurance is that you have to ensure your own insurance policy claims, with no other options.
- Although you are not guilty, you have to pay from your insurance as this is a no fault case.
- There is no chance to sue the driver who is responsible for the accident.
- You can not even claim reparations for your pains and sufferings you have gone through for the accident.
Cooperate with Your Insurer While Dealing Such Cases
In a no fault insurance case, you must cooperate with your insurer to make your compensation assured.
That means you have to submit all the necessary details, such as proofs, documents, evidence, etc., to the insurance company as they want.
The company might ask you to make a medical assessment by the doctor they select. You must agree to this term.
Otherwise, they might not get approved to pay the amount you claimed or might make your claims prove fake.
All the things they do are only to justify your claims, whether they are logical or not.
For that reason, no matter what, you must cooperate with your insurer to get a clear idea about your claims.
Frequently Asked Questions
Question-1: What Is No-Fault Insurance?
Answer: No fault insurance is a kind of insurance policy that provides you a financial backup and compensates for your losses in a car or motor accident. It is almost like first-party coverage or personal injury protection insurance.
Question-2: What does No Fault Mean in Insurance?
Answer: No fault means when you get injured in an accident, your own insurance coverage will compensate for your loss no matter who is guilty of the accident.
Question-3: How Does No Fault Car Insurance Work?
Answer: When anyone is injured and faced with damages in a car accident, their car insurance policy pays an amount for their medical and other expenses to reduce their unexpected financial crisis. No-fault insurance companies employ adjusters to investigate the claims and compensate accordingly.
Question-4: Why Is No Fault Insurance Bad?
Answer: No-fault insurance is sometimes bad because there is no option for suing the driver responsible for the accident. Moreover, you have to pay from your insurance coverage, although you are not guilty.
Question-5: Whose Insurance Pays in A No Fault Insurance?
Answer: In no fault insurance, the injured driver typically claims reparations against the other driver’s insurance company. Once the claim is granted, the other driver’s insurance pays the compensation to the injured driver.
Question-6: Does No-Fault Insurance Cover Car Damage?
Answer: Generally, no-fault insurance does not cover car damage in a car accident. But if you point out your claim specifically for the car damage, they might pay you a little for repairing your car.
Question-7: Can You Sue in A No Fault State after an Accident?
Answer: It is a bit difficult to sue the faulty driver after an accident in a no fault state. But if you are desperate to make the person punished, you can take help from the personal injury lawsuit for suing the faulty driver in a no fault state.
Question-8: Which Provinces have No Fault Insurance in Canada?
Answer: In Canada, no-fault insurance is available in the provinces like Quebec, Ontario, New Brunswick, PEI, and Nova Scotia.
Question-9: Does A No Fault Accident Increase Insurance Rates?
Answer: No, a no-fault accident does not increase your insurance rates at all. In case your insurance company does not have anything to give you, your insurance rates will not go up.
Final Words
So, we conclude our discussion here. Hopefully, you have learned at least the basic things about no-fault insurance that every driver should know.
If you face such accidents in your life, you can use the information discussed in this article.
Again, if you face any further difficulties about no fault insurance, you can contact a professional personal injury lawyer who can best assist you in this case.
