Liability insurance is your main financial defense against catastrophic damage you might cause to others or their property. But it's not always clear who's to blame for an accident, and proving fault, when it is possible, can entail delays and expensive legal action. Meanwhile, the victims may not get paid.
Enter no-fault insurance, an attempt to take the fault out of liability. The idea is to have accident victims' medical expenses paid by their own insurance companies, regardless of who is to blame for the accident, thereby eliminating the costs and delays of legal actions.
No states currently function under a pure no-fault system. Instead, several states have adopted a modified no-fault system. Some of those states have adopted "add-on" plans that increase the benefits you can obtain from your own insurance company but do not restrict your right to pursue a liability claim. No-fault laws vary greatly, but they do tend to have some elements in common.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
- Your insurance company pays you and others covered by your policy for medical bills, lost wages, the cost of hiring people to do household tasks you are unable to perform as a result of injuries, and funeral expenses up to specified limits.
- No-fault plans don't pay for property damage. This is covered by other parts of the policy.
- No-fault plans don't pay for pain and suffering. For that you have to be able to sue someone.
- You usually can't sue others until expenses of the type covered by the no-fault insurance exceed a certain level. By the same token, you are immune to suits by others until their costs exceed that limit.To protect themselves against fault-based suits permitted under no-fault regulations, drivers in some states must also buy traditional liability insurance. But liability payments may be reduced by compensation received under the no-fault provisions.Add-on no-fault plans generally provide benefits similar to, but less generous than, the pure no-fault programs, and the injured person has the right to sue for pain and suffering.
-
-
Stock Market Today: Stocks Head South as Treasury Yields Hit New Highs
Expectations for another potential rate hike sent yields on both the 2-year and 10-year Treasury bonds to their highest levels in almost two decades.
-
Biden Cancels $37M in Student Loan Debt for Phoenix University Borrowers
Student loans for 1,200+ Phoenix University enrollees cancelled over misleading ad campaign.
-
Auto Industry’s Electric Transition Sparks Tension With Autoworkers: The Kiplinger Letter
The Kiplinger Letter DoE announces $12 billion to support factory retrofits, which autoworkers fear may mean the end of numerous auto manufacturing jobs.
-
When Should You Buy Life Insurance?
insurance If no one depends on your income for support, you probably don't need life insurance at all.
-
Domestic Airfare Is Still Cheaper Than Pre-Pandemic Prices: Kiplinger Economic Forecasts
Economic Forecasts Although domestic airfare is cheaper, some international flights are still more expensive than usual.
-
Five Reasons Your Healthcare Costs Will Ease: Kiplinger Economic Forecasts
Economic Forecasts From technical advancements to cheaper drugs, healthcare cost relief is coming.
-
Banks Lost Billions on Bad Loans Last Quarter: Kiplinger Economic Forecasts
Economic Forecasts Bank deposits are also down, and more people are tapping into their savings.
-
Passenger Rail Is Making a Comeback: Kiplinger Forecasts
Economic Forecasts Privately-owned passenger rail lines are popping up in the U.S. which could make getting to popular vacation destinations easier.
-
Hospitals Say Increased Medicare Reimbursement Is Not Enough: Kiplinger Economic Forecasts
Economic Forecasts Medicare will bump up hospital reimbursements by 3.1% in 2024, but the industry says it's not enough as it comes off its worst financial year of the pandemic.
-
Central Banks Near End of Rate-Hike Cycle: Kiplinger Economic Forecasts
Economic Forecasts Some Latin American countries are even cutting interest rates, and more central banks could follow in 2024.
