No Fault Auto Insurance
by F Sneneh, Chicago Auto Insurance Agent
No-fault Automobile Insurance. The conventional insurance and tort systems for compensating car accident casualties have been subject to reviews and criticism for many years. The debate and criticisms of the conventional insurance system center around the following issues:
** A large number of innocent people are not able to collect anything for their bodily injuries under the conventional tort system because the bodily injuries are caused by legally uninsured and hit-and run operators.
** Bodily Injuries from car crashes are a society problem for all insured parties whether they are at fault or not. · It is often difficult or impossible to determine who is 100% at fault in an auto crash.
** The conventional tort system has resulted in number of serious claims being not paid or underpaid because of lack of adequate insurance limits. On other occasions, there are lots of proofs that many small auto insurance claims are overpaid to avoid lengthy settlements.
** With the conventional insurance and tort systems, a large percentage of premium money is used to pay for lawyers, not victims (claims costs and lawyers’ fees).
** The Conventional tort system is not fast. In some states, delays of 2 to 6 years between an accident and a resulting trial are not uncommon.
The outcomes of these problems to the conventional systems of compensating car accidents victims have lead to the passage of some sort of no-fault law in over half the states in the United States, besides the District of Columbia and Puerto Rico. The idea of nofault insurance is old having been initially proposed in the 30s. However, the first such law was passed in the State of Massachusetts in 1971, and most existing laws date to the 1970s. A few additional states enacted laws in the 1980s and early 1990s, but a few others also terminated these existing laws. Today 24 states, in addition to the District of Columbia and Puerto Rico, have no-fault laws.
No-Fault States include Florida, Hawaii,Kansas ,Kentucky ,Massachusetts ,Michigan ,Minnesota ,New Jersey ,New York ,North Dakota ,Pennsylvania , and Utah.
The lack of growth of states not adopting no fault laws results from many factors against nofault laws, including the following:
** They have not produced lower auto insurance premiums, perhaps because the right to sue is only modified for relatively minor injuries.
** The conventional systems of compensating auto accident victims work well with most claims being solved relatively fast and out of court.
** The inability to sue, in some states, for pain and suffering has not been popular with lawyers and many operators, who feel such suits are their right.· There are ways to modify the current tort systems, like limiting lawyers’ fees and increasing the use of arbitration instead of courts.
** Some of the costs of car accidents tend to be shifted from negligent parties to innocent victims.
