No-fault insurance is a system adopted in some states that essentially bypasses the conventional legal procedure which finds fault in many accidents. (This is the procedure by which you hire a lawyer, file suit and possibly go to court to prove the accident was the other guy’s fault.) No-fault simply does away with the concept of one party or the other being at fault.
There are no lawyers, no court, no judge, no jury, no lengthy lawsuits against the other party. This is considered beneficial to taxpayers, because it eliminates costly legal proceedings that the state must manage, and to insurance policyholders, because it helps keep rates down.
If you are insured in a no-fault state and have an accident, in many instances you don’t go after the other driver. You contact your own insurer and file a claim. Your own insurance policy compensates you for damages, medical expenses, lost wages, etc.
The type and range of no-fault coverage varies from state to state. What defines the limitations of no-fault policies can differ in two critical areas:
• Threshold—The type or cost of damage/injury that triggers the need for legal action.
• Mandated Benefit Level—The package of benefits (medical, wage loss, re placement services and other expenses) your state requires you to carry.
The details of no-fault insurance can be complicated. Contact your agent or your state’s insurance department for further information.
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