No Fault Car Insurance : 3 Things You Should Know

A no fault insurance policy covers your car crash damages, even if you are not the cause for the car accident. Then again, I have found 3 main disadvantages of having a no fault insurance policy.

The first downside is that...

1. You've Still Got to Cover Car Damages

Despite what people think, a no fault insurance policy really doesn't cover all of your damages. If you were in a accident, you might still have to pay for your car repair.

The reason is that the policy only will pay for your car accident injury expenses and lost working gross income. If you want money for your auto repairs, you are going to proceed with the exact same basic steps as someone who lives in a fault state.

This implies you will need to start up a accident claim against the other vehicle driver's liability insurance or collect money from your own auto collision coverage.

The actual issue with this is that getting money for your auto repair can often be confusing and irritating. The majority of people do not understand how the claims process works. They make several very easy mistakes that end up costing them serious money. Most people don't get that the insurance company works hard to give them the minimum settlement possible because, they are after all, a business looking for profit.

As such, many car owners have complained about getting very poor settlement checks that do not completely take care of their repair expenses.

You may want to steer clear of the headache of starting an auto accident claim against another driver by getting paid from your own collision coverage. Though, in this case you must pay your auto insurance deductible, which is commonly close to $500 per car accident claim.

The next downside of a no fault auto insurance policy is that it....

2. Isn't Going To Pay All Your Medical Bills

If you were injured in a car accident, your no fault auto insurance policy is only going to pay for your medical expenses up to your insurance policy limits.

If your medical charges end up being more than your policy limits, you will need to start an auto accident claim with the other driver's insurance company.

Even so, before you can get going with your insurance claim, you need to exceed your no fault state's minimum cash threshold. This cash threshold is the minimum amount your medical costs must be before you can file a auto accident claim against another driver.

Almost every no fault state has a different cash threshold. So even before you start thinking of filing an insurance claim, it is best to check if your full medical fees exceed your state's threshold requirements. Otherwise you will need to pay for your bills via own pocket, which often can easily cost you a lot of money.


The third downside of having a no fault insurance policy is that....

3. You Aren't Getting Extra money for Pain and Suffering

Having a no fault policy prevents you from being recognized for your pain and suffering due to the auto accident.

This is a big drawback of this car insurance policy because in virtually all personal injury settlements, the most significant amount of your cash settlement is for your pain and suffering.

In case you're significantly injured and want extra money, you have to meet your state's "injury threshold". This injury threshold is basically the state considering your injuries and concluding if they are significant enough to start a personal injury claim.

As you can tell, the question of "serious" vs "non serious" injuries is often rather subjective. If your state determines your injuries aren't serious, then you will be unable to be paid back for your injuries.

Therefore its important you understand your no fault state's requirements and how to calculate your personal injury settlements.

Find out more about starting car accident claims and personal injury settlements