No-fault insurance is a kind of car insurance coverage that will help pay for your and your passengers’ medical bills if you’re hurt in a car accident, it doesn’t matter who caused the accident. No-fault insurance is also know as personal injury protection, or PIP insurance.
No-Fault Insurance System
There are small a handful of states that recognize what’s called a “no-fault” car insurance system (Florida, Michigan, New York, New Jersey, and Pennsylvania have a verbal ceiling. The other states—Hawaii, Kentucky Kansas, North Dakota Massachusetts, Minnesota, and Utah—use a monetary ceiling). No-fault car insurance means that your own insurer will pay some or all of your medical bills and any lost wages if you get into a car accident, no matter who was at fault for the accident. A no-fault claim is usually made through the “personal injury protection” or “PIP” requirements of a car insurance policy (this sort of coverage is mandatory in no-fault states).
Each no-fault state’s regulations are different. A few are even alleged “choice” no-fault states (New Jersey, Kentucky, and Pennsylvania), where vehicle owners, for the most part, have the choice to “opt out” of the no-fault insurance system when buying their car insurance policy.
What is A No-Fault Insurance Claim?
A no-fault insurance claim, commonly known as a Personal Injury Protection claim (or PIP claim), is one you make with your own car insurance company for the payment of medical bills, lost wages, and some other out of pocket damages following a car accident.
A key element to the no-fault system is that you are never allowed to start a claim for pain and suffering using your own car insurance. You can only go after this kind of recovery against the at-fault driver if your medical bills reach the insurance ceiling– or your injury is deemed adequately serious — so that you’re allowed to step outside of the no-fault rules. As an example, your state’s no-fault law may prohibit a personal injury claim against the at-fault driver unless your medical bills surpass $3,000 or you suffer from a broken bone or bones. This aspect of no-fault laws is a legislative venture to simplify car accident cases, smaller claims in particular.
Say that you get into a car accident in Florida. The other driver was at fault, you broke your right leg in the accident, and you acquired $7,500 in medical bills. In order for you to step outside the no-fault system and start a claim directly toward the at-fault driver in Florida, your claim must satisfy the “serious injury” ceiling in place under state law.
That means, because of the car accident, you’ve had experience through any of the following:
• substantially full disability for 90 days. • bone fractures • significant disfigurement • permanent restriction of use of a body organ or member • extensive restriction of the use of body function or system
Because your injuries entitle you under this definition (because of your broken leg), you can start a 3rd-party liability claim or personal injury lawsuit directly towards the at-fault driver, demanding compensation for all forms of losses, as well as pain and suffering (again, is not available in a no-fault insurance claim). But if you suffered from only minor injuries that don’t qualify as “serious” under New York’s ceiling, you’re restricted to a claim under your own PIP coverage.
* No-fault car insurance is only applicable to car accident injuries; for vehicle damage from a car accident, you are free to proceed with a claim against the at-fault driver.
You Must Work With Your Insurer in a No-Fault Claim
In a no-fault insurance claim, the normal rules for dealing with an insurance company in a personal injury case are usually disregarded. For example, you do not want to give a recorded statement to the other side’s insurance company. For instance, in a no-fault claim, state law generally requires you to work with your insurer. Your policy may have you give your insurer a recorded statement and might require you to get a medical examination with a physician chosen by the insurance company. If you fail to cooperate in this process, your insurance company may have reason to deny the claim.
If you get into a car accident in a no-fault state and are in need of legal advice at any point in your claim process, it would be a good idea to contact an experienced car accident lawyer.
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