No Fault Insurance: A Case Study
by Ina Segurian
http://www.gapinsurances.com
Did you know that if you live in one of the states that
are under a non-fault insurance system that your
insurance company will not pay for the other parties'
damages, even if you are at fault?
In a no fault state, the law states that drivers must
have insurance for their own protection, regardless of
who causes an accident. Your company would pay for the
damages you suffer regardless of fault, and the other
driver's insurance company would pay for their loss.
The theory is that since we all agree to be responsible
for ourselves that there will be no uninsured motorists
in these states. Well, interesting "theory".
You see, the idea is that the no fault system
guarantees everyone will get immediate treatment in the
event of an accident. Also, it may reduce the legal
and other costs which come with claims against the
other driver. Again, the idea is this will result in
lower premiums but unfortunately the issues of
liability remain and can actually make premiums more
expensive.
However, because no state is pure no fault, drivers can
always be held financially responsible for the cost of
injuries they cause in certain circumstances - that~s
the loop hole. Some states allow injured parties to sue
if their injuries meet certain standard for severity,
while others allow it when total costs reach a certain
dollar level.
Below is a classic case of a no-fault situation. Neighbor
lived in a four-plex apartment building. It had a 4-stall
garage along with a 4-stall wide driveway. Because the
driveway was so wide it was second nature for the tenants
to pull out of their parking spots and turn around in the
driveway instead of backing into the street.
One Sunday afternoon, one of the tenants decided to go
visit a friend. She got into her car and began backing out
of the driveway in her normal manner. When all of a sudden
she felt a bump and heard a scream. At first she thought
she ran over her cat who would occasionally escape. She
opened her car door and found half of a body. Scared half
out of her mind, she shut the car off and ran into the
house and immediately called 911.
The driver was too scared to go outside at that point. As
far as she knew, the half body, belonging to one of her
neighbors, was still under the car and the driver was
certain the injuries were serious. Her left rear wheel had
crossed her body from her thigh on one side on the diagonal
to above her pelvic region. The driver later learned that
some strong man from across the street came over and picked
up the car so she could get out from underneath.
The neighbor announced that she was feeling fine and didn~t
want to go to the hospital. But the police and ambulance
didn~t feel the same way so they took her the four blocks
to the hospital. Turns out the neighbor was sunbathing
behind her car and somehow the driver didn~t see her when
she walked to her car. She ended up with no broken bones,
no internal injuries; just a tire track from her right
thigh across to her left stomach.
Feeling guilty, the driver accepted full resopnsability
and wanted to do whatever was necessary to make it up
to her neighbor. So, she called her insuance company
to explain the situation. The insurance company wanted
the following information: does the victim drive and
does she have her own car. The answer to both
questions was "yes". The driver was then told that due
to the no fault insurance issue, the victims own car
insurance company would have to cover the victims
expenses, even though the driver was clearly at fault.
Interesting theory, no?
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