No Fault Insurance Law: 5 Effects to Accident Claims

no fault insurance accident claims

The financial costs related to auto accidents in America are staggering. In fact, the American Automobile Association (AAA) recently released a report stating that these accidents cost the U.S. $164.2 billion every single year. It should be noted, however, that the financial implications for those involved are also serious. Unfortunately, those living in no-fault insurance states see these effects even more than others throughout the country. This is why individuals living in these states should understand the financial effects that no-fault laws can have on their auto accident claims.

1. Lower Settlements

Unfortunately, no-fault insurance laws have a very high potential of resulting in lowered settlements. This is because, in no-fault states, policyholders traditionally can only recover from their own insurer. In these instances, the ability to recover compensation other than traditional special damages becomes more difficult, and this can greatly reduce the settlement that the person would otherwise get if they were in a traditional tort state.

2. Potential for Wrongful Death Cases

It's an unfortunate truth, but various studies have found that no-fault insurance laws may actually increase the number of fatal accidents in a state. One recent case in Florida, one of America's no-fault states, ended in the death of a young woman. While it's tragic that the young woman died in the accident, a car accident lawyer in West Palm Beach will likely be able to bring forward a claim for additional damages against the other driver's insurer; and this is usually the case in all no-fault states.

3. Keeps Minor Accidents out of Court

One of the main effects, and the one most intended by the passage of no-fault insurance laws, is that of keeping minor accidents out of the courtroom. In other states, a fender bender that leads to a minor injury could end up in front of a judge, and unfortunately, these court costs could actually take away from the compensation that an individual receives. This means that, when it comes to non-serious collisions, no-fault laws may save everyone money.

4. Disallow Torts based on Medical Bills

In some states, known as quantitative threshold states, whether or not an injured individual can bring forward an additional tort case against a negligent driver will be based on their medical bills. If a state's set threshold is $20,000, for instance, a person will only be able to sue for damages such as pain and suffering if their medical bills exceed that amount. If they fall under this financial threshold, it may not be possible to receive additional compensation. 

5. Additional Compensation only for Specific Injuries

In contrast to quantitative threshold states, other no-fault states, known as qualitative no-fault states, base a person's ability to recover compensation from sources other than their own insurer on the severity of their injuries. In most cases, these injuries must be extreme instances such as permanent disfigurement, disability or death. These requirements can vary, however, so a person should seek out legal assistance if they hope to recover a fair settlement and avoid financial difficulties in the future. 

Auto accident claims are costly however they're looked at, but for those in no-fault states, the financial implications can be life changing. Luckily, those residing in these states can still recover substantial compensation for general damages such as pain and suffering and loss of companionship. Whether it is a car accident lawyer in West Palm Beach or New York City, both in no-fault states, the complexity of these laws definitely make this a bit more difficult than in traditional tort states, but with the right legal help, gaining a fair settlement is nowhere near impossible.


    • Corina Ramos

      Corina Ramos 03/06/2014 3:24 p.m. #

      It's funny I'm reading this just now. I was on my way to pick up my daughter and there was this lady zig zagging between lanes. The lady next to me and I were going 20mph. We were in a school zone.

      Apparently the lady behind us was in a hurry. Well, up ahead was a dump truck waiting on traffic to turn. As soon as I passed it the other two cars collided trying to pass one another!

      Crazy right? I'm not sure if we're a no-fault state but I'm betting these ladies wish we are.

      These are important things to keep in mind. I hate the thought of being in an accident but we have to be educated just in case.

      Great post Sicorra! Talk to you soon!

      • Sicorra

        Sicorra 03/07/2014 4:48 p.m. #

        Thank goodness the lady did not hit you. Too many people drive without paying attention or they do not plan their drive out well enough, leave late, and then drive too quickly, esp through school zones. That is when you always wish a cop would be there to see that, but unfortunately they never are.

    • Christy Garrett @ Uplifting Families

      Christy Garrett @ Uplifting Families 03/06/2014 9:37 p.m. #

      Don't forget to make sure that you have coverage for uninsured/underinsured motorists. In December of 2013 I had a minor accident in a parking lot, the other party opened their car door into our SUV. They ended up leaving the scene of the accident before the police officer arrived. Luckily, I wrote down their plate number and the insurance company is going after the other party. But the kicker is the other party didn't have insurance on their car (hence why they left the scene). My insurance picked up the tab and is seeking to collect the amount from the other party.

      • Sicorra

        Sicorra 03/07/2014 4:50 p.m. #

        Uninsured motorists is a sticky situation for sure. Good to hear that your insurance company took care of things for you and is going after them.

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