Every state implements and enforces their own regulations regarding car insurance rates and laws. A state will either follow the tort method of insurance or it will follow a no fault method of insurance. If you reside in a no fault state, then there are important factors that you need to know. You should research what method that your state uses. There are both advantages and disadvantages to living in a no fault state.
No fault insurance can follow several variations and the laws can be slightly different from one state to another. Usually, if an accident occurs in a no fault state, then each party's insurance company will be responsible for paying their respective driver's damages and injuries, regardless of who is actually at fault for the accident. However, the person who caused the accident will still be charged and will still have their insurance premiums increase.
No fault car insurance has some advantages for both the courts and for a driver who has caused an accident. Motorists with bad driving records will benefit because their can insurance company will only have to pay out for damages to their client's vehicle and not for damages caused to another person's property or vehicle. Court costs are lowered as well because fewer cases are tried to determine fault, except for major accidents that result in death or large financial settlements. You spend less time filing claims because your insurance company pays for damages. You don't have to spend weeks or months in court trying to recover for lost wages or medical bills. You are guaranteed to receive payment for damages and injuries no matter what.
However, there are some disadvantages to living in a no fault state. Because insurance companies don't lay blame if an accident occurs, innocent victims cannot sue for pain and suffering or emotional distress that may result from injuries sustained. No fault insurance will only pay up to your insurance policy limits. So, if your medical expenses are higher, then you will be responsible for the excess charges. As well, if you suffer any property damages, then you will either have to file a claim through your own collision insurance or you will have to file a claim against the other driver.
You should always be aware of which type of insurance method your state of residence follows. Ask your insurance agent for this information when you shop for car insurance rates. This way, you will know exactly how to proceed if you need to file a claim with your car insurance policy. Otherwise, you may find yourself on the hook for large financial payments.