All About No-Fault Insurance
No-Fault Insurance – Playing
the No-Blame Game
Although liability
insurance is the first
defense against any damage
you
do to other people or their
property, sometimes it’s not
always apparent
to those who matter that you
are, indeed, the one to
blame. It may take
the wisdom of King Soloman
and the second sight of a
clairvoyant (or a
good judge) to determine who
actually caused the accident
in question.
This kind of dispute can
entangle both you and the
other driver in a
seemingly endless Twilight
Zone of costly legal
maneuverings. While all
that is going on, nothing is
being done for the victim,
whose medical
bills may be rivaling the
national debt of at least a
Third World
country.
Is That the Cavalry
Coming?
This is where, ideally,
no-fault insurance can come
galloping in to the
rescue. If an accident
victim’s own insurance
company is taking care of
their medical expenses
despite who caused the
mishap, it eliminates the
expense and mind-numbing
delays caused by legal
actions, the poor person
who got crunched can get
medical treatment, and the
biblical king and
fortuneteller can be fired.
Who All’s In on This?
Currently, according to the
Insurance Information
Institute
(www.iii.org),
12 states and
Puerto Rico have put
no-fault insurance into
effect as law, and some have
“add-on” plans designed to
increase your
benefits without getting in
the way of your right to go
after some blankety-blank with a
liability claim who’s
injured you or damaged your
property.
Some Shared Somethings
Although no-fault laws vary
widely (and wildly) from
state to state,
there are several things
they do share commonly:
1. The insurer pays you and
anyone else covered by your
policy for lost
wages, medical expenses, the
fee for hiring others to do
household work,
yard work, and other chores
around the old homestead,
and even funeral
expense up to certain limits
(no, you’re not gonna get a
gold-plated
casket).
2. Property damage is not
covered by no-fault
insurance, but is covered
by other portions of a good
policy from a reputable
insurer.
3. Forget about getting paid
for any pain and suffering.
You have to sue
to get compensated for that,
unless you have one of those
“add-on”
policies, then you can go
after ‘em with your teeth
bared and your
lawyer in tow.
4. Until expenses covered by
the no-fault insurance go
past a certain
amount, you can’t usually
sue others even though you
feel they royally
deserve it. On the other
hand, you, too, are
lawsuit-exempt until their
expenses exceed that same
limit.
Other Stuff You Might
Need to Know
Some states compel drivers
to buy plain old traditional
liability
insurance in order to
protect themselves against
those mean old
aggravating (when they're
filed against YOU!)
fault-based lawsuits that
are permitted within certain
states’ no-fault rules and
regulations.
Liability payments can be
reduced, however, by the
payments received
under the no-fault
conditions.
No-fault policies that have
add-ons added on (that is
not a typo)
include benefits less
generous but similar to the
purely no-fault
programs, and with these
add-ons, the victim in a
wreck maintains that
precious, God-given right
(when we're the one suing!)
to sue for pain
and suffering.
No-Fault Insurance –
Endangered Species?
The wide variation in
no-fault laws in each state
is staggering.
Monetary thresholds range
from $1,000 in Kentucky to
$4,000 in
Minnesota. The medical
benefits limit in Utah is
only $3,000 while in
Michigan, there is no
medical benefit limitation.
This does not mean you
should become a doctor, move
to Michigan, get involved in
a no-fault
insurance scheme, and get
rich off that state’s
unlimited medical
benefits compensation. The
temptation to cheat is
strong, though, as
fraud investigators are
finding out with an amazing
number of dishonest
medical and other shady
professional providers
coming under scrutiny.
Unwarranted medical
treatment, all kinds of
exaggerated expenditures,
and the padding of other
claim-related expenses in
fraudulent personal
injury protection (PIP)
claims are rocketing
premiums higher than the
space shuttle in many
no-fault states. This
criminal phenomenon is
getting to be so prevalent,
it’s actually threatening
the continued
existence of no-fault
insurance coverage. These
kinds of abuse and
system-cheating shenanigans
prompted one state, New
Jersey, to take
drastic steps to stop these
swindlers, and other states
are looking hard
at New Jersey’s latest
protocol to form their own
no-fault law
revisions. With enough
review, revisions, and
crackdowns on the crooks,
no-fault insurance may be
here to stay.
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