Car insurance in the U.S. is regulated at the state level. Because regulations vary from state to state, there really is nothing uniform about our system. This is easily observed when you compare at-fault and no-fault insurance. Some states use the former system, others use the latter.
The differences between the two immediately become apparent following an accident. As you will learn from this post, the type of system a driver operates under determines his or her ability to sue following an accident.
We will start with the no-fault category because only 12 states operate under this system. No-fault insurance involves a system in which drivers procure their own insurance policies to cover themselves against personal injury and property damage. Personal injury lawsuits in no-fault states are limited.
Let us use Florida as an example. According to the VG Law Group, Florida’s no-fault system requires drivers to carry their own personal injury protection (PIP) to cover out-of-pocket expenses, including lost income and medical care. Each driver covers him or herself regardless of who is at fault.
In the event of a minor accident, contacting a Florida personal injury lawyer would only help if a serious injury were sustained. Yet this is where the system gets a bit muddled. Florida law has an established threshold that determines whether or not a claimed injury is serious. A serious injury meets at least one of the following conditions:
– It is permanent
– It includes significant and permanent scarring or disfigurement
– It includes significant and permanent loss of bodily function.
Any personal injury claims that do not meet one of three conditions do not meet the standard for suing. Victims rely on their own PIP and health insurance plans to cover their expenses.
Thirty-five states have an at-fault system in place. At-fault insurance is based on the premise that the costs associated with an accent can be distributed among all parties based on level of liability. This system allows accident victims to sue for all sorts of damages.
Litigating at-fault cases is covered under what is known as tort law. In such a case, it would be up to the court to decide how much liability to assign each driver involved in an accident. The court’s findings determine how much each insurance company pays to cover the costs of the accident.
Where a Florida personal injury attorney may not be able to help after a minor accident, a personal injury attorney in Ohio could help victims of minor accidents in the Buckeye State. The only catch is one of the policy limits. Insurance companies only indemnify drivers up to their policy limits.
Insurance Choice States
There are three states that allow drivers to choose between at-fault and no-fault policies. Those states are Kentucky, New Jersey, and Pennsylvania. Drivers in all three can choose the type of policy they want at the time of purchase. However, they must stick with their choice once made. A driver cannot elect for no-fault policy and then switch immediately after an accident just so he or she can sue.
Drivers in the three choice states that elect for at-fault insurance retain the right to sue just like drivers in states whose systems are fault-based. Policy limits are still in play, though.
Is one system better than the other? That depends on your point of view. Both at-fault and no-fault systems have their strengths and weaknesses. It really depends on how you view car insurance and the protection it should offer drivers. Preference really boils down to reserving the right to sue other drivers.