Being involved in road accidents is a nightmare for any motorist. Minor incidents cause inconvenience, discomfort, and emotional distress. Meanwhile, extreme scenarios can be life-threatening, cause serious injuries, and be traumatic to the people involved.
Given how dangerous and costly a vehicular accident can be, it remains a common occurrence in many countries. For instance, around 4.7 million passenger cars in the United States were involved in accidents in 2 020. These cases accounted for 52% of the total traffic crashes in the country in the said year.
That’s why many vehicle owners and drivers acquire no-fault car insurance, also called Personal Injury Protection insurance, or PIP, to cushion the financial impact of a car accident. The owner uses this coverage to cover vehicle repair costs and medical expenses in case of an accident.
Compared to traditional car insurance, there’s no need to determine who’s at fault in case of vehicular collision when filing a no-fault insurance claim. Instead, the owners can file a claim against their policies and get the agreed-upon amount in the insurance coverage.
Presently, 12 states in North America require drivers to have a no-fault insurance policy. Some states have variations to this mandate, though drivers can benefit from having this coverage in virtually every state.
What are the costs entailed in this type of insurance policy? Continue reading this article to find out.
Acquiring A No-Fault Insurance Policy
Those who reside in states that require no-fault insurance should determine the minimum coverage amount or coverage limits required by their local government. For instance, New York has a minimum PIP coverage of up to USD$50,000 per person.
Consider whether the state-set minimum coverage amount is sufficient, and see if it’ll benefit you to add coverage. Additional coverage entails additional premium costs, though you might also benefit from the added protection when needed.
Furthermore, you’ll also have to determine whether to extend the coverage to your family members and loved ones. Extending it to family members is offered in some states, and it may be more convenient and cost-effective for you to acquire this policy. Lastly, explore discount options available if you obtain other forms of coverage in conjunction with your no-fault policy.
Filing A No-Fault Insurance Claim
What should you do if you ever get involved in a vehicular accident and own a no-fault policy? Experts recommend carefully considering the scenario and seeing whether filing a no-fault claim against your policy will be ideal.
For instance, you may need to file a claim if you or a passenger in your car sustained bodily injury. You’ll need to discuss your options with your insurance company and file injury-related claims against your policy. For instance, you can include the financial impact of the loss of wages and medical costs and see how you can receive monetary compensation for them.
Processing a no-fault claim is usually faster and less tedious than traditional coverage since there’s no need to prove fault. Once the paperwork has been processed, your insurer will payout your claim based on the coverage limits of your policy.
How A Car Accident Affects No-Fault Insurance Policy Premiums
In some cases, those who aren’t at fault in a car accident may still see an increase in their premiums depending on several factors. These factors include the specifics of the accident, claims history, and the type of coverage a policy owner has.
However, it’s worth noting that not-at-fault claims are generally filed against the insurance policy of the at-fault driver in almost all US states. Hence, if you can file a claim against the at-fault driver, your no-fault insurance coverage won’t be affected. Many companies don’t increase premiums once a policy owner files a claim against the no-fault insurance.
If the offending party flees the scene and dodges their financial obligations, some insurers can adjust their premium rates after you file a no-fault claim against your policy. While the economic impact may be lighter than if you’re the at-fault party, there’ll still be additional costs that you could avoid with proper documentation. Given this, you must exchange details with the at-fault driver regardless of how you decide to file a claim.
Your no-fault car insurance should serve your best interests, especially in cases where you’re at a disadvantage. To ensure that your insurance company will be of help in times of need, you’ll need to carefully select an insurer with a good reputation among its clients. Also, equip yourself with sufficient knowledge about the insurance terms and conditions in the states that you drive in so you’ll know your options in case of any involvement in road accidents.