Car accidents happen every day. As such, states have developed their own sets of laws to handle car accident claims. How a claim is handled primarily depends on whether the accident occurs in a fault state or a no fault state.
Fault State
Most states use a fault-based system. Fault is usually determined by the state law where the accident happened. In these states, insurance companies pay in accord to the amount of fault that each party had for the accident. The insurance company determines which party is at fault and whether the other party bore any responsibility for the accident. The insurance company for the at-fault driver is responsible for paying damages caused by the at-fault driver. However, it may deduct compensation in an amount proportionate to the other driver’s portion of fault.
One problem that arises in these states is that the insurance companies may not agree on who is at fault, which can lead to long and expensive court battles. This sometimes has the consequence of raising insurance premiums for all drivers to offset these costs.
No-Fault States
In order to deter the high number of insurance claims and personal injury lawsuits, a handful of states use a no-fault system. The rationale is that fewer inflated insurance claims will help prevent inflation of insurance premiums for everyone. Some states allow insured individuals to opt in to the no-fault system. When a person is injured in an accident in a no-fault state, he or she submits a claim to his or her own car insurance policy under a personal injury protection claim. This type of coverage provides compensation for medical expenses and lost income. To receive coverage, it does not matter which party is responsible for the accident. Personal injury protection does not provide compensation for property damage or pain and suffering. In most cases, this resolves the claim.
However, the injured person may still be able to file a claim against the driver at fault or file a personal injury lawsuit against him or her. Each of the no-fault states includes a specific threshold that a victim must meet in order to take such action. In some states, this threshold is based on the severity of the injuries. For example, recovery may only be possible if the accident led to a significant loss of the use of a body part, permanent disability, a fracture or disfigurement. It may also be based on a length of time in which a person has been disabled, such as 180 days. In other states, the threshold is based on the amount of damages that the victim suffered. Some states permit recovery if either definition is met. If this threshold is met, the victim is able to pursue the full spectrum of personal injury damages, including their pain and suffering.
Add-On Coverage
Some states allow for drivers to purchase add-on coverage, which is additional personal injury protection as optional coverage. This coverage provides compensation to the driver without having to prove fault. However, the driver can still sue and be sued based on fault.
Choice States
Some states have the driver decide when he or she purchases automotive insurance whether he or she will use the fault based system or the no fault based system. If he or she is involved in an accident, the system he or she chose goes into effect.
Requirement for Cooperation
In states that use no-fault insurance, there is usually a requirement that the person making the claim cooperate with his or her own insurance company. While in a typical fault-based insurance company a claimant may not provide a recorded statement to the defendant’s insurance company, this advice does not usually apply to a no-fault claim.
State laws generally require the claimant to cooperate with the insurance company, including giving a recorded statement and attending medical examinations that the insurance company schedules and with whom a physician is selected. If the accident victim does not cooperate, the insurance company may be entitled to deny the claim and cancel the insurance policy.
Due to the complicated nature of automotive accident claims, it is important that a claimant understand the laws that apply in the state where the accident occurred. Many accident victims seek the legal assistance of a personal injury attorney to assist them with the claims process.
