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How Do No-Fault Laws Affect Your Car Accident Case?

— October 27, 2021

Juggling insurance claims with personal injury claims is complicated at the best of times, and it would be unwise to attempt to handle everything without legal counsel.

In most states – if not all of them – drivers must carry auto insurance in case of accidents. Even small repairs on vehicles after accidents can be expensive, and insurance is designed to cover us when we cannot afford these costs. Some states require drivers to carry no-fault insurance. Under these kinds of insurance policies, drivers must file a claim with their own insurance instead of going after the other driver’s insurance. However, drivers with no-fault insurance do not have to prove fault to get a payout.

Going through no-fault insurance is often required after car accidents in states where this kind of insurance is mandatory. Unfortunately, no-fault insurance generally covers only certain damages. No-fault insurance requirements often make it difficult to file a personal injury lawsuit if your insurance fails to meet all your needs. In many states, drivers must meet certain criteria before they are allowed to file a lawsuit. Injured drivers should hire qualified personal injury lawyer with experience handling car accident cases if they wish to pursue a personal injury lawsuit.

How Do No-Fault Laws Work After a Car Accident?

Ordinarily, drivers who live in no-fault insurance states may be required to go through their own insurance rather than pursuing the other driver for damages. It is important to check with a car accident attorney in your area about the specific requirements of your state. Some states require you to file a claim with your insurance first, while other states are more flexible.

Depending on your state, you must carry a certain amount of personal injury protection insurance that will pay you after an accident. Different states may have different minimum requirements, so the amount of money you get may vary depending on your state’s requirements and what kind of insurance policy you carry.

Drivers must be covered regardless of who is at fault. This can be helpful in cases where proving fault is difficult, or a driver is partially to blame for the accident. However, your no-fault insurance likely only covers limited damages. Medical bills and property damage are frequently included under no-fault insurance, but any pain and suffering or other non-economic damages are usually excluded. It may be necessary to pursue a personal injury claim to get all your damages paid for.

What Happens When No-Fault Insurance Fails to Cover All Your Damages After a Car Accident?

Being covered by no-fault insurance does not necessarily prevent you from taking further legal action. In many cases, a driver’s insurance does not adequately cover all their damages. Many important injuries, like pain and suffering, are not often covered by insurance. Punitive damages are also typically not covered by no-fault insurance. When your insurance falls short of your actual financial needs, you may file a personal injury lawsuit against the other driver. However, the presence of a no-fault insurance policy may complicate your situation a bit.

The rules for filing a lawsuit after collecting no-fault insurance payouts will vary from state to state. Some states set limits on who can sue. You may have to demonstrate that you have suffered damages of a certain dollar amount and “serious” injuries.

X-ray of person with broken collarbone; image by Harlie Raethel, via
Image by Harlie Raethel, via

If your state requires you to prove serious injuries, there may be rules on what kind of injuries qualify for a lawsuit. Generally, your injuries must be more serious, like broken bones, loss of limbs, or loss of bodily function or senses. A driver with no serious physical injuries and whose damages are totally covered by their no-fault insurance may be barred from filing a lawsuit.

When filing a lawsuit, you may have to sue the other driver, their insurance, or both to get the compensation you need. If you believe a lawsuit is necessary, speak to a car accident attorney in your area for guidance.

Advantages and Drawbacks to No-Fault Insurance in Car Accident Cases

No-fault insurance laws are not always a burden to litigious drivers. In many cases, the payouts from no-fault insurance policies can help drivers during a time of great need. However, depending on your case, no-fault insurance may get in the way more so than it helps.

Pros of No-Fault Insurance

Drivers who file a no-fault insurance claim often receive faster payouts. This is partly because they do not need to prove fault, only damages. If drivers have fewer or minimal damages, a no-fault insurance payout might adequately cover all their damages. A payout from a no-fault insurance policy might make a lawsuit unnecessary. Drivers could save time, money, and energy by completely avoiding a lawsuit.

Even if your no-fault insurance does not cover all your damages, you will have at least some of your damages covered. Even if it is not enough, having that extra money can be a major help to injured car accident victims before they pursue legal action against another driver.

Cons of No-Fault Insurance

Many non-tangible or non-economic damages are not covered by no-fault insurance. Your pain and suffering, both physical and mental, are unlikely to be covered by your insurance. If you suffered a physically painful injury or your accident was emotionally traumatizing, your no-fault insurance may not compensate you for these injuries.

Even under a no-fault insurance claim, you are not guaranteed a settlement from your own insurance company. You may still have to negotiate with your insurance company and prove the extent of your injuries. This negotiation process may take up precious time and prevent you from filing a personal injury lawsuit sooner.

Hire an Attorney Who Can Help You Get Compensation Beyond Your No-Fault Insurance

In any case, after a car accident, you should seek advice from an experienced car accident attorney in your state. An attorney can help you negotiate with insurance companies and prepare to file a lawsuit if that is the route you wish to take. Juggling insurance claims with personal injury claims is complicated at the best of times, and it would be unwise to attempt to handle everything without legal counsel.

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