What You Need to Know About Car Insurance When You're Living in a No-Fault State

If you're moving from an at-fault state into a no-fault state and are now trying to figure out the intricacies of your car insurance policy you're probably feeling a bit like a fish out of water. No-fault car insurance isn't difficult to understand (the basics are actually pretty brilliant, once you've got it figured out). What's most important is figuring out how to make no-fault insurance work for you.

The basic principle behind no-fault car insurance is simple-your insurance company doesn't care whose fault the accident was, they want to settle your claim and move on. Whether your accident was your fault or not, your insurance company is going to be the one to handle your claims after an accident-all of your claims. That means that you're never going to be left trying to deal with uncooperative insurance companies-or even worse, uninsured motorists that leave you holding the bag on repair bills and medical expenses you can't even begin to pay without going on a strictly Ramen diet.

From a legal point of view, no-fault car insurance eliminates the need for drivers to seek litigation to get their expenses paid following an accident. If their insurance company is the one taking care of it they'll never have to come up with the time and the funds to take the other driver to court. Claims get settled more quickly, judges spend less time dealing with the (relatively) trivial issue of handing out settlements in cases where the party at fault is almost immediately obvious, and lawyers spend their days gnashing their teeth because of all the cases they've lost. (Needless to say, no-fault car insurance wasn't popular with the legal community when it first went public.)

No-fault car insurance also takes the non-economic claims out of the accident process. If you're covered under no-fault insurance you can't file a lawsuit against the other driver for pain and suffering, or mental trauma, or anything else that doesn't have a designated dollar sign in front of it. (Apparently no one has ever managed to come up with a set price for sanity.) In fact, unless your injuries are severe and/or the property damage ridiculous, you're not allowed to file a lawsuit at all. Your car insurance provider settles your claim, and life moves on.

The good news is that no-fault car insurance isn't quite as nice to the driver at fault as it sounds like it should be. Insurance companies still base their premiums on the risk that they're going to have to pay out a claim at one point or another. The driver that caused the accident is still going to walk away with the higher monthly premiums, while the other driver shouldn't see any changes in their premiums at all.

In some states (those that are strictly no-fault) you're not going to have a choice about whether or not you want no-fault auto insurance. It's going to be mandatory. In others you will, and you're going to have to make the choice that's best for you.

Clifford F. Berman is the CEO of QuoteScout.com. For more information about no-fault car insurance, visit them on the web at http://www.QuoteScout.com.

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