Does It Mean Nobody Is at Fault in No-Fault Car Insurance States?

Words used can be misleading at times. Does it mean that fault is not assigned according to no-fault auto insurance state laws? If everyone settles their own damages there is no need to look who is at fault, isn’t it?

This is a question that may be silly but not difficult to understand where it comes from. First of all no-fault has nothing to do with who is at fault. No fault state laws does not prevent insurance companies looking into whose fault is an accident. They just require the policyholders to settle small injury losses through their own insurers rather than chasing after the third parties and opening up many small legal cases.

Auto insurance companies would still want to know if the accident was the fault of their policyholder or the third party. If they determine that their policyholder was at fault it is highly likely that they would increase the premium a bit more than a claim that wasn’t the policyholders fault. So to answer this question; you may not pay the injuries of third parties but you may still go down as the at fault driver in the accident (at least, as far as your auto insurer concerned).

Also, most no-fault states set a limit as to up to how much damages you should claim from your own insurer. If the damages are higher than certain threshold or in special circumstances where the negligence of a driver caused serious suffering the third parties are allowed to sue the at fault driver. So, police and auto insurers would try to find who is at fault in an accident of certain size for several reasons.

1. Police would want to decide if there is a need for charging the driver with a traffic violation and if there is a need to charge extra premium in case of insurers.

2. They would need to do their jobs properly just in case this goes to court or some claims come back to the insurers.

Clearly, the driver who is responsible for the accident needs to be identified in any case. Otherwise, people cannot be punished for their irresponsible driving practices. In other words, bad drivers would be allowed to walk away with no consequences or little financial or legal punishment. This cannot be allowed as it would lead to more and more insurance losses. Modern automobile insurance pricing is based on penalizing risky drivers and rewarding the good ones.

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