Every state abides by their own laws in regards to auto insurance. Drivers who fail to follow the specific details of these auto insurance laws will be reported to law enforcement and must deal with the consequences, which range from heavy fines and suspensions to possible time in jail. These auto insurance laws relate to the different types of liability every driver must carry, the amount of liability that every driver must carry, and the way in which the at-fault driver of any accident is to be held liable. The at-fault driver will need to know whether the state of residence operates under a tort law or a no-fault law. Knowing the difference between these laws and which one a driver is required to follow according to state law may help the driver choose the types and amounts of coverage to purchase and add to their auto insurance policy.
A tort law is one that is followed and enforced by some states of our country. A tort is when someone is found legally liable for any intentional or negligent harm inflicted upon another. The party who is responsible for the damage is also responsible to pay for the expenses of repairing the damage, both property damage and bodily injuries. When the harm or accident is found to be unintentional, tort auto insurance will aid the at-fault driver by paying for the repairs of the other party’s damaged property and injuries, as well as trying to protect the at-fault driver from being sued.
Within the tort law are two options; full tort and limited tort. Some states, like New Jersey and Pennsylvania, offer drivers the choice of participating in a full tort law or a limited tort law. The difference between the two is one choice will decrease the policyholder’s premium costs, and the other choice will provide more coverage for the policyholder and members of the policy (and family) for any future accident-related medical bills. While some drivers feel this is an easy choice based on the cost, other drivers struggle with what to do and wish for a crystal ball. Because most drivers don’t have access to future telling, they must look at these options and weigh the costs and benefits of having a full tort or a limited tort.
If the driver chooses to declare and follow a limited tort law, that driver is giving up future paid expenses after an accident in exchange for a lower cost in auto insurance premiums. More specifically, the driver is surrendering his or her right to sue the other driver found at-fault for certain injuries, such as pain and suffering. There are some exceptions to this rule, where a court can award pain and suffering costs to the driver that will be paid for by the at-fault driver. Under limited tort, the injured and not at-fault driver may be awarded pain and suffering if the at-fault driver was drunk and did not die in the accident, the driver was injured while in a commercial vehicle, the at-fault driver is registered in another state, or the injury was deemed very serious. These exceptions are pretty rare and are also subject to the decision of a court of law, especially what constitutes as a serious injury. Many drivers feel limited tort is the way to go because it is cheaper and they do not foresee the involvement of being in any accident that would call for suing the other driver for these expenses.
Full tort provides more coverage for the driver because he/she is able to sue the other driver, who is found at-fault for the accident, for all medical expenses exceeding the insured limit, including pain and suffering and possibly loss of wages, due to the injuries sustained from the accident. Most people feel anyone who has been severely injured in an accident should be able to find a way to get back to the way life was before the accident. Most often, money is what helps as it pays for these things, including any excessive medical or auto repair bills.
The other states that are not following a full or limited tort law obey a no-fault law. In a no-fault state, each driver involved in the accident is financially responsible for the cost to repair their own vehicles and pay for their party’s medical expenses related to the accident. Like limited tort, injured drivers or passengers who were not the cause of the accident may file a lawsuit against the at-fault driver, but again, this can only be done if certain requirements are met. These requirements usually involve meeting a verbal or a monetary threshold that is determined by the court.
Originally there were a few goals that were hoped for by enforcing the no-fault way. One purpose of no-fault insurance is the keep the costs of auto insurance lower by preventing court cases stemming from accidents. If the accident wasn’t severe enough and didn’t meet either a verbal or monetary threshold, each party’s insurance covers the cost of the accident and the insurance company does not need to pay for the costs of holding a trial. Not spending additional money on court fees keeps a driver’s rates lower after an accident. Another hopeful idea by using the no-fault law is to avoid insurance fraud from accidents. When the insurance companies of both parties involved pay for their own expenses, there is little room for fraudulent claims made by the policyholders. However, when the threshold for suing is based on monetary amounts (from bills) there is more of a desire for people to make fraudulent claims to be able to reach that threshold and get more money by suing. Sometimes the medical professionals are to blame for attempting fraud as they order unnecessary medical exams to push the total cost of medical bills closer to the threshold.
Once you have figured out which law your state follows, reevaluate the coverage your auto insurance policy offers you and find out if there are changes you should be making to provide you and your family with more effective protection. Having to comply with a no-fault state may enforce you to provide more medical protection, such as medical payments coverage or personal injury protection, even if you currently have health insurance. States following a tort law may also require you to spend more on your insurance if there are expensive cars in your area since they would cost you more to fix if you were to ever hit one.
