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No-Fault Insurance

The State of Florida requires what is known as “no-fault” insurance, which requires insurance companies to cover medical expenses for injured parties in the case of a car accident, no matter who was at fault in the accident.

However, Florida’s legislature is now at work to undo the state’s no-fault insurance system. The state’s senate has approved a bill that would end the state’s existing program, requiring motorists to only carry bodily injury insurance instead, according to a News Service of Florida report. The senators say the move will likely lower insurance premiums for Floridians.

Car insurance can be confusing, with many interlocking policies and varying names and coverages. Different states have different rules. In this article we ask: What is no-fault insurance? And why does it matter if a state requires it or not?

No-fault insurance

No-fault insurance is also often called personal injury protection, or PIP, coverage. It covers medical payments regardless of who is at fault in an accident, and may cover lost wages due to associated injuries, too. In the event of death, it may cover items like funeral expenses. However, PIP does not cover damage to your vehicle, vehicle theft, or property damage to others’ vehicles. It also has limits and may not cover medical expenses beyond the coverage limits.

It may be available as an add-on to your insurance, or it may be required by your state. Currently, a handful of states, including Hawaii, Oregon, New York, Florida, and Kansas require PIP insurance. In other states, such as Texas, Washington, and Virginia, it is available but optional.

The PIP policies are different from bodily injury coverage in that it doesn’t matter who was at fault for an accident for the coverage to kick in. Bodily injury liability coverage is required in nearly every state.

In a no-fault state, every driver involved in an accident files a claim with their insurance afterward. Each insurer is then required to pay its policyholder according to their coverage benefits.

The controversy behind it is that filing for an insurance claim with your own insurance could push your premium rates up, even when the accident was not your fault. In a traditional insurance environment, you file a claim with the responsible party’s insurance if you were not at fault, and your rates do not necessarily go up. They don’t always necessarily go up with PIP coverage, either, but it depends on the policy and the state.

Coverage in the case of an accident

In Florida, the one senator who voted against the recent bill to end the program argued that it could increase uninsured motorist rates. Most insurance policies require coverage for uninsured motorists as well—essentially, a security measure in case an accident is caused by someone who is not carrying insurance and therefore may not be able to cover your expenses.

In a no-fault state, documentation for insurance purposes is different, because you’ll be filing with your own insurer for benefits. It also affects the ability to file a personal injury claim against the other person’s insurance in the event they were at fault for your injury. Because the state may not assign fault within the accident, it may be more complicated to establish facts in a case.

However, it’s not impossible. Depending on the circumstances of the accident, you may still be able to establish that the other driver was negligent—driving without headlights on in heavy fog, for example, or texting while driving—and that can help support your case for recovery from the other person’s insurance.

Because of the complexity of insurance law and the tapestry of different state rules, you may want to consult a personal injury attorney’s expertise to determine what the best course of action is for you.

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