At Fault vs No Fault Auto Insurance

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The are two completely different approaches to how auto insurance works. This video explains At Fault vs No Fault States. Each state in the US has to decide …

13 COMMENTS

  1. Litigation happens because insurance companies decide how much damage and to what extent you deserve to treat for your injuries, very much like healthcare insurance companies decide what kind and how much treatment to pay for your health needs, always with profit and loss and not your best options in mind. Yes, there are people who take advantage of litigation. No, it's not always necessary. But it IS an incentive for the insurance company to provide better compensation on the front end. If all insurance companies were actually held to the premise of their reason for existence (to return you to the state you were in prior to the loss) without regard for the maximization of profit, there wouldn't be a need for ambulance chasers. Where things get most screwed up, I think, is in the expectation versus reality game. People have been led to believe that they can gain by suing Insurance companies. So medical professionals boost the cost of injury treatment and over prescribe to make more money, mechanics and auto body shops charge more for insurance claims work than OOP (out of pocket) jobs and such, driving up the cost of everything.

    No fault states leave you at the mercy of the insurance companies. Again, like your healthcare coverage. The reason we need laws and regulation of insurance companies is to be sure they provide the coverage in the manner most beneficial to the insureds. Mutual Insurance companies (companies who don't bank profit for their shareholders, but for their members) are in business for the purpose of paying claims. For-profit companies are in business to make money for their shareholders. The profit from insurance is in premium collected but not paid in claims. Returned to its members by mutual companies in the form of better coverage and service as well as lower premiums is a better situation for the insureds. While not the cheapest nor the easiest to quality for, they do provide the best protection.
    While for profit companies may charge the lowest premiums, they also pay out at the lowest rate, especially when their qualifications are low. Which means you, the insured, are taking cuts to your coverage in exchange for both the savings in premium and the profit to your company.

    Then, there is the question of diminished value, which is almost never paid for. Think of your world as a balance sheet. Every penny comes from somewhere. If it's not you and your labor, it's the value of your vehicle, or the coffers of your insurance company or that of the other driver. Every penny you save must be made up somewhere. In lower coverage to you, which translates to higher risk and greater cost potential for you down the road. You are banking (gambling) on nothing happening in a chaotic world in which you have very little control.

    If we all just treated Insurance the way it was intended to work, cost would naturally go down for all of us. That means being responsible drivers, eliminating distraction (including phones, food, maps, make-up, books, and every other thing I've seen drivers doing that wasn't part of operating a two thousand pound piece of steel moving at a trajectory and velocity capable of maiming and killing and inflicting life altering damage on themselves and others) and driving with care to avoid collision in the first place.

    Driving is a privilege, not a right. It is earned by education and retained by conscious effort. If we stop approaching driving from a selfish, me first, attitude and become more willing to takes responsibility for our own actions as well as accepting our ability to support and help one another (forgiving a little the mistakes of others), we could not only reduce insurance premiums, but make our roads a lot safer.
    I take claims for people who drive like morons in parking lots, who roll stop signs, who follow too closely, who fail to anticipate the actions of other drivers, and who drive distracted. I have insureds attempt to file claims while they are driving, which to me is the epitome of arrogance. Multitasking is a myth. Driving in itself requires greater awareness and enough different mental and physical processes that short-cutting results in loss. Virtually every accident comes down to a couple of causes: driver recklessness and inattention or lack of skilled operation. Our society values personal freedom (which really translates to leaving you on your own when the shit hits the fan) without fully making you aware of the possible risks to you. Experience is a poor teacher when it comes to deadly accidents. Regret doesn't make up for the impact and is much too late in application. People die because others decide to modify their vehicles but not their skill sets, or drive with the attitude that if someone hits them it's their fault, that their insurance will make things right instead of actively participating in accident avoidance.

    Want cheaper insurance? Drive like you deserve it. And tell your friends and family to do the same.

  2. If your in a no fault state, say your a young kid, 20 will say, forget ever getting a new car, they wanted to charge me 4000 a year, no fault is not a plus if your young or near a major city, it's God awful and God forbid you get in a wreck cause most people never call cause there's no point, all that does is hick your insurance to stupid amounts

  3. Actually I looked it up it's the insurance they The only thing that's different at not at fault States but Is everything else but they say intrudes rates are still measured out by who's at fault so therefore if you still get rear ended its my going to raise your insurance So you're actually wrong about that part

  4. You could still be considered no fault in an accident even if you don't live in one of those States It's a hassle if you are not at fault in in fault accident or in an accident that's literally no one's at fault for some reason the insurance companies are mormon willing to get the process moving fast if you're the person and if you're the one who's not at fault insurance companies tried it make you jump through hoops that's what happened to me

  5. Some one is at fault always Florida is a no fault and it suck big most people carry the min of 10,000 dollars so that is all thay have to pay so if you get hit and it is the other ones fault and you are hurt thay only have to pay 10,000 for your med bills you have to pay the rest so you are f big time I am moving out of FLORDA because of this I was hit in the rear at a light the guy emited he was on his phone and was 100 % at fault my truck was totaled and I was rushed to the ER. I had 3 rubshers disk in my back and had to have sergery I lost 5 mounts of pay and all his insurance was liable for is 10.000 which is the min you have to have in fl so lucky I had a 100.000 on my policy to help cover the rest of the bills but I still had to come out of pocket for a accident that was not my falt never got back pay for work and now I got a truck payment and the rest of med bills and a bad back this no falt is dangerous it is away for people to drive under insured it protects the insurance company not you

  6. I have an insurance with At Fault state. But I met with an accident in a no fault state. Will the explanation provided still hold good in this scenario ?

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