To answer the question: what is no fault insurance, we take it on from many angles. No fault insurance is a type of insurance policy in which the insurance company covers damages incurred by the policy holder regardless of who was at fault for the accident. There are benefits and downsides to this type of insurance and while no state has adopted a pure no fault system, many states, including New York, have included elements of no fault insurance in their auto insurance requirements.
In order to register a vehicle in New York, the law requires that the driver obtain several types of coverage before the vehicle can be processed. One of those types is known as personal injury protection (PIP), which is also called no fault insurance. Generally speaking, no fault insurance requires drivers to retain insurance that covers them in the case while also placing limitations on a driver’s ability to due others for liability.
In a no fault state, a person’s auto insurance company with pay for their own damages in the event of an accident and the other drivers involved will be covered by their own respective insurance companies as well. In New York, the no fault system prevents individuals from suing each other for damages except in cases of serious injury or death relating to the specific accident.
The greatest benefits of no fault insurance are to the court and law enforcement system of the region under the policy. In the course of a year, a state with an at fault insurance system sees thousands upon thousands of personal injury claims. Many of these claims are valid; however, a great deal of them may be eventually dismissed for lack of cause. Personal injury claims can easily wear down the civil court system and therefore it is beneficial to filter the cases brought to court down to those that warrant action.
Additionally, no fault insurance guarantees that a driver will receive immediate medical attention in the event of an emergency without having to worry about the process and procedure of filing a claim. It also lowers costs of filing a claim because the payout is an automatic response to the need, which can even indirectly lower premium costs in the long run.
Lastly, no fault insurance provides compensation for non-driver individuals involved in an automobile accident, such as bicyclists or pedestrians. The no fault insurance law in New York states that a driver’s insurance will cover the damage and injury of any pedestrian or bicyclist who is injured in an accident involving their vehicle. This allows pedestrian and bicycle accident victims to obtain compensation for the medical expenses caused by their injuries without having to wait out the process of a claim.
Many New Yorkers do not prefer their state’s no fault policy because they believe it restricts them from obtaining the maximum amount of compensation that would have been available in a personal injury claim. This is a valid point. While no fault insurance payouts are prompt, they only cover a person’s basic medical expenses and property damage without regard for other damages caused by the accident, such as emotional trauma and punitive damages.
Furthermore, many opponents of no fault insurance argue that the policy, by its very title, disregards the principles of responsibility and individual accountability that are at the foundation of American society. By overlooking the element of fault in an accident, the policy ends up treating good and bad drivers the same in stark contrast to other policies which reward good drivers and sanction bad ones, holding them accountable to their actions. Car accidents make up a large portion of negligence claims against liable parties under tort law but under no fault insurance, a majority of those claims are removed from that category of law altogether.