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No Fault Insurance

Many people are confused by the term “No Fault Insurance,” thinking that it means exactly what it seems: “If I have a car accident, it will not cost me because it was not my fault.” Unfortunately, things are not always as simple as they first appear. From an insurance company's perspective, if there is an auto accident, then somebody must be at fault. However, it is not an all or nothing determination. The fault for an accident is often shared between both (or more) parties. No fault insurance allows each driver to contact his or her own insurance company in the event of an accident. This allows them to receive financial benefits immediately, and is much better than forcing drivers to wait while their insurance companies haggle over who was at fault and what financial compensation should be paid by each insurance provider.

It is only later that the insurance companies determine the percentage of fault applicable to each driver. If you are completely, partially, or not at fault for the accident, your insurance company will inform you. It is likely that your premiums will rise if you are deemed to be at least partially responsible for the accident, and it will also be reflected on your insurance record. Drivers who worry about how their insurance company will treat them can be reassured on one important point: the rules for determining fault are the same for all insurance companies, at least those in the same state.