If you’ve been in a crash, you’re probably wondering if a no-fault accident goes on your record. A lawyer shares what to expect.
If you’ve been involved in a car accident, you’re not alone. It’s a scary and confusing time.
One of the most common questions after an accident is how it will affect your finances. Will your insurance rates go up? Will you have a blemish on your driving record?
Depending on your state, the result of an accident on your driving record and car insurance can be radically different. Twelve states have passed “no-fault” car insurance statutes, nine of which require Personal Injury Protection (PIP) coverage.
In most no-fault states, PIP claims for relatively mild injuries are made to your own insurance company, regardless of who was the at-fault driver.
While this arrangement frees up courts for more serious cases, it also raises concerns. One of the most important: If your insurance company has to pay for your injuries even if you were not at fault, will your insurance rates increase? Even more critical: Does a no-fault accident go on your record?
What Is a No-Fault Accident?
No-fault means that each party’s medical costs are paid for by their own insurance company, rather than the at-fault driver’s insurance company paying for everything.
A “no-fault” accident isn’t one for which nobody is responsible.
No-fault accident laws are designed to resolve minor accidents more quickly by requiring car insurance companies to compensate their own insureds for injuries, regardless of who caused the accident.
Twelve states and Puerto Rico have passed “no-fault” car insurance statutes, nine of which require auto policies to include PIP coverage.
The following states require no-fault insurance:
- New York
- North Dakota
These three states allow policyholders to choose between no-fault and traditional auto insurance:
- New Jersey
A no-fault accident can be anything from a high-impact crash to a minor fender bender, although severe injury claims often exceed the limits of PIP coverage. If the police are called, they will determine responsibility for the accident and note the results in a crash report.
Even if you didn’t cause the accident, you must notify your car insurance company. Under PIP, your carrier would pay for medical bills and lost wages.
Property damage and non-economic damages (like emotional distress) usually aren’t covered by PIP.
If your injuries are serious enough to reach the PIP threshold, you can pursue compensation from the at-fault driver’s insurance company, including compensation for pain and suffering.
Serious car accident injuries should be handled by a personal injury attorney to maximize compensation for the victim.
Does a No-Fault Accident Go on Your Record?
Yes, a no-fault accident will go on your record. All past auto accidents will show up on your driving record. How they are notated and how long they will stay on your record varies by state and the individual circumstances.
A clean driving record is just as important in a no-fault insurance state as it is elsewhere.
For example, let’s look at the most populous state with no-fault insurance laws: Florida. The Sunshine State’s driving record makes distinctions between “guilty” and “adjudication withheld” dispositions of traffic violations.
A “guilty” result is usually for moving violations where a court found you responsible for the accident. “Adjudication withheld” entries are less serious violations in which you plead no contest and go to traffic school.
Moving violation: When you break a traffic law while your vehicle is in motion.
Plea of no contest, or nolo contendere: When you accept the court’s judgment that you broke the law without admitting guilt. This is usually done to get a lesser penalty from the court.
Regardless of the no-fault state, the most important entries on your driving record are the “crash” entries. Crash entries show when citations are issued and whether you were responsible for an accident.
Most crash entries stay on your record for three to five years. However, crash entries can stay on your record for 10 years or more depending upon the severity of the accident or other factors. If you’re in a crash and cited for DUI, the entries on your record will stick around longer.
Because accidents are still on your driving record, no-fault insurance laws don’t change the substance of your state driving record. Just because the other driver’s insurance company paid for their injuries does not mean that you escape legal consequences. Whatever insurance you have, your state’s DMV will know about all your accidents.
Your driving record is thus one of the most important factors in determining the price of your auto insurance policy. If you are responsible for more accidents, it won’t matter if you have a no-fault insurance policy. It won’t matter if you have a standard policy. You just need to be a safe driver.
Will Your Premium Increase After a PIP Claim?
After taking care of an injury, the biggest question most people have is whether their insurance rate will go up after the no-fault accident. The answer depends on several factors.
1. If You Caused the Accident
“No fault” doesn’t mean “no consequences.” Except in rare circumstances, somebody causes every car accident. Insurance companies have to pay out money for an accident. Thus, it makes sense that they would want to charge high-risk customers higher premiums.
An at-fault driver in an accident will almost certainly see their rates increase. According to one industry estimate, if you are at-fault in an accident causing less than $2,000 in damages, you could see an average premium increase of $366 per year.
Having a no-fault insurance policy doesn’t mean that your carrier won’t care if you caused the accident.
Insurance companies always care if your behavior is costing them money. If your behavior presents a risk of costing them more money in the future, they will charge you more money. While this may seem callous, it’s how the business works.
It’s the investigating police officer’s job to determine who caused the accident regardless of insurance laws. If the at-fault driver was you, get ready for an increase in your car insurance rates.
2. If You Didn’t Cause the Accident
You have a much better chance of seeing your premiums stay the same if you were not to blame for the auto accident. Like so many other things in insurance, though, that result is not guaranteed.
It may surprise you to know that car insurance companies are very honest about this. Allstate Insurance indicates that fault for an accident is only one factor that it considers when raising rates.
Your insurance company will take into consideration factors that may seem unfair. Chief among these are the cost of your claim and your state driving record. The insurance company uses all these details to decide whether to raise your rates in response to any accident. The fact that it wasn’t your fault is important, but not the only consideration.
Details of your car accident are collected and loaded into insurance claim data depositories like Verisk and the Comprehensive Loss Underwriting Exchange (C.L.U.E.). Information from these databases is then used by insurance companies when underwriting insurance policies and setting rates.
Your accident details will be compared against not only your prior claims, but other claims similar to yours. In the event that you get into other car accidents, they will count against you.
The good news about a no-fault injury claim is that it will generally be smaller than other claims. At least in theory, that means that it would have less of an effect than more serious accidents. Still, if you have other recent accidents on record, your insurance costs may go up.
Protect Your Driving Record
Being involved in an accident is stressful enough without the added worry of the higher insurance bills. It helps to be aware of what kind of car insurance policy you have and how an accident will affect your premium.
Everybody wants cheap car insurance, but that pales in comparison to having a car accident stuck on your state driving record for years. Both your finances and your driver’s license will be okay if you drive safely at all times.
If you’re in a car accident, take the proper steps to protect yourself. Then, whether your concerns are about your injuries or about possible issues with your insurance provider, contact a qualified attorney in your state to discuss your accident case.
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