What you need to know if you live in a mandatory no-fault insurance state, and how to get fair compensation from your insurance company.
The 1960s ushered in a time of change all over America. Along with other big institutions, the auto insurance system came under fire from policyholders, and soon lawmakers, who were dissatisfied with the way claims were handled.
Traditional liability insurance policies, still the norm in most states, won’t pay a victim’s claim until they determine who caused the car accident.
Back in the day, it was an expensive and time-consuming process to prove fault. Even minor accidents often ended up in court.
To cut down on lawsuits and allow insured victims to receive a faster payout, several states passed laws allowing victims to recover some medical expenses directly from their own insurance company.
No-fault insurance was born.
Understanding No-Fault Insurance
If you live in a state with no-fault insurance laws, your insurance company is required to provide Personal Injury Protection (PIP) coverage on your auto insurance policy.
PIP will cover your medical bills and related costs no matter who was at fault for a car accident. Your passengers may also be eligible for your PIP coverage after a crash.
PIP will not compensate you for pain and suffering or emotional distress.
In no-fault states, you can’t seek compensation from the at-fault driver for most injury claims.
Depending on the laws in your state, PIP will cover:
- Medical bills
- Out-of-pocket expenses for things like medications, bandages, crutches, etc.
- Lost wages
- Funeral expenses
- Replacement services, like the cost to have your lawn mowed
Twelve states and Puerto Rico require no-fault insurance:
Kentucky, New Jersey, and Pennsylvania allow policyholders to choose between no-fault and traditional auto insurance.
The District of Columbia and ten states allow PIP coverage to be added on to auto insurance policies. Only D.C. restricts policyholders with PIP coverage from suing the at-fault driver.
The states with add-on PIP and no lawsuit restrictions are:
What No-Fault Won’t Cover
PIP coverage is only for injury claims, up to the stated limits, and it may not be enough for severe injury claims.
No-fault insurance rules don’t apply to property damage claims.
You can file a property damage claim with your own insurance if you carry collision coverage, but you will probably have to pay a deductible.
Or, you can file a property damage claim with the at-fault driver’s insurance company.
Property damages may include:
- The cost of your car repairs
- Rental costs while your vehicle is in the shop
- Replacement costs for personal items lost in the crash, like eyeglasses, clothing or your laptop
- The book value of your vehicle if it’s a total loss
Evidence Supports Your Injury Claim
Even in a no-fault state, what you say and do after a car accident will have a big impact on the success of your claim.
You don’t have to prove who caused the crash to file a PIP claim with your insurer. But what if your PIP limits aren’t enough to cover your injuries? Or the other driver blames you for property damage?
Protect your financial future. Start gathering evidence at the accident scene.
Call 911: Always call 911 after an accident, even just a fender-bender. Tell the dispatcher you are injured, and if you know of anyone else who might be hurt.
If you’re worried the accident was your fault, it still benefits you to notify the police. Most states require drivers to notify police even for minor accidents, depending on the estimated amount of vehicle damage.
Know the rules for your location with our Car Accident Guides by State.
Medical care: Let paramedics treat you at the scene. Shock and stress can mask injury symptoms. You could be badly injured and not realize it. If they want to transport you to the hospital, let them take you.
If you aren’t taken directly to the hospital from the scene, see your doctor as soon as possible, preferably the same day. If you have to, go to the nearest emergency room or urgent care center.
Refusing or delaying medical treatment after an accident gives the insurance company a good excuse to deny your claim. They won’t hesitate to argue the crash didn’t cause your injuries.
Photographs and videos: Try to take photographs and a video of both cars, the surrounding area, and debris on the road. You can’t take too many pictures.
Pictures of your injuries taken at the scene and throughout your recovery will also help your claim.
Look for witnesses: Talk to anyone who saw the accident. Independent witness statements can be very convincing evidence to prove the other driver’s fault.
If you find a cooperative witness, ask them to write down what they saw and heard, along with their contact information. Ask them to sign and date their written statement.
Police report: In most cases, when you call 911 the police will come to the scene. An officer will investigate the crash and prepare a formal police accident report.
Police reports are convincing evidence of fault that insurance adjusters take very seriously. A copy of the official report should be available within a week or two of the accident.
When You Need an Attorney to Win
Notifying your insurance company is the first step in filing a claim for no-fault PIP coverage. Even if you don’t think you’re injured or think the accident wasn’t your fault, you have a contractual obligation to notify your insurance company after an accident.
Almost every auto policy has a “notification and cooperation” clause stating you agree to tell the insurance company about every accident, and you also agree to cooperate with the company’s investigation of the accident.
The clause will have language like this:
“Insured (you) agrees to notify the insurer (your insurance company) of any accidents and thereafter comply with all information, assistance, and cooperation which the insurer reasonably requests, and agrees that in the event of a claim the insurer and the insured will do nothing that shall prejudice the insurer’s position…”
Cooperating with your insurance company’s investigation can get sticky. Insurance companies hate to shell out money for injury claims. Always on the lookout for fake injury scams, the adjuster may start treating you like a crook.
If your PIP claim is denied, or you feel the adjuster is making unreasonable demands for proof of your injuries, you may need a personal injury attorney to help you win a decent payout.
Your attorney will know if the insurance company’s behavior and mishandling of your injury claim are grounds for a bad faith lawsuit. Bad faith lawsuits can lead to thousands of dollars in jury verdicts against the offending insurance company.
Claims that Exceed No-Fault Limits
States with no-fault laws allow exceptions for severe, high-dollar injury claims.
Each state has different rules that allow seriously injured claimants to pursue the at-fault driver for damages, including amounts for pain and suffering.
Talk to an attorney about:
- Wrongful death claims
- Claims for injured children
- Injuries resulting in disability for any length of time
- Disfiguring injuries to the face or body
- Permanent injuries
There’s too much at stake to handle complicated, high-dollar injury claims on your own. There’s no obligation, and it costs nothing to contact an experienced personal injury attorney to discuss the value of your claim.
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