Five Things You Should Know About No-Fault Auto Insurance

No-Fault Auto InsuranceDepending where you live, you might have heard that no-fault insurance policies can save you money on auto insurance. While this can be true, there are still five things you should know about no-fault car insurance:

  1. There is always someone at fault. The name no-fault isn't really accurate, though it sounds pretty catchy. Even if you have a no-fault policy, you're still technically to blame if you cause a traffic accident.
  2. Your insurer will pay your claim. What "no-fault" really means is that regardless of which driver was really the cause of an accident, your insurer will pay for your claim. If the other driver in a crash also has a no-fault policy, their insurer will pay for their claim. This means that no one wastes time dickering over who was at fault in order to get an insurance payout, reduces the likelihood that lawyers will be involved, and saves money.
  3. Your rates can still be affected. Even though your insurer pays your claim no matter who was at fault, a police report will still name the responsible party. If you were the cause of an accident, you may be facing an at-fault premium increase when it's time to renew your auto insurance policy.
  4. You may be waiving your right to sue. One of the goals of no-fault insurance is to eliminate lawsuits for smaller accident claims, so these policies generally cap the amount you can claim for injuries that aren't really serious. This means you can't sue over any crash, only those where state regulations consider the injuries serious.
  5. Restrictions on your rights pay for those lower premiums. With caps on damage claims and limitations on the right to sue, it's clear that no-fault insurance isn't the right choice for everyone. Still, if you haven't been in an accident in many years, don't drive a lot during peak hours, and really want to save money, these policies can be a good choice. As with everything, your mileage may vary.
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