Filing a Claim in a No Fault State: Know all your Options

by Ladyblogger on August 6, 2013

Anyone who has bought any type of insurance likely knows that these policies can be quite complex. Between understanding what is covered and what isn’t, a person can end up completely confused by the time they purchase a policy. In some states, however, certain types of policies can be even more confounding to the typical person. “No fault” states, for instance, create an insurance atmosphere that most people in the country aren’t accustomed to. This is why everyone within these states needs to understand how these laws work.

What are No Fault States?

Most states have insurance laws that require the negligent party in an accident to cover all of the victim’s financial liabilities related to the accident. In no fault states, such as Michigan, however, the law is a bit different. No fault states shift the responsibility and risk of driving to each individual driver. In an effort to lessen the burden of accident claims on the court system and reduce insurance costs, these states have instituted rules that require a person’s own insurance company to cover their losses.

This isn’t to say that an insurance company will have to pay for all costs related to an accident. They are, however, required to cover their own policyholder’s financial losses. These losses can include medical bills, lost wages and even rehabilitation. When it comes to points like pain and suffering and other special damages, however, an injured party can still bring forward a personal injury claim.

Problems with No Fault Insurance

Though it seems as if no fault insurance would be a good way to ensure that all accident victims, regardless of who was at fault, would be taken care of, the laws do present a few difficulties for those who weren’t at fault for the accident. Many states have limits, for instance, on the amount of money that a person can recover for lost wages. This can cause problems for those who sustain injuries that prevent them from working.

Additionally, a problem arises when an individual is involved in accidents with out-of-state drivers who aren’t mandated to have no fault insurance. A Michigan driver who is involved in an accident with a Georgia driver, who isn’t required to have this special type of policy, may still be sued in a court of law. Retaining a Michigan car accident lawyer would be ideal when this situation occurs. Additionally, a lawsuit may be forthcoming if an insured driver is involved in an accident in another state.

The Different Types of Claims

No fault states create a third party system that most drivers would do well to learn. The policyholder in no fault states is known as the “first party.” Whenever an accident occurs and the insurance company, also known as the “second party,” must pay for their policyholder’s medical bills, this is known as a first party claim.

As mentioned earlier, there are some instances in which another driver’s insurance company may be liable for the other driver’s damages if their policyholder was at fault for an accident. In these cases, it’s a “third party” claim that must be brought forward. The third party is the other driver involved in an accident, and if any of the aforementioned special damage recoveries are forthcoming, their insurance company will be liable.

When to Retain a Lawyer
Retaining a lawyer, particularly if involved in one in a no fault state, is always a good consideration to be made. A car accident lawyer will be able to counsel you as to what kind of claim should be made based on the extent of injuries and damage that has occurred. They are knowledgeable about such claims and will make recommendations based on the evidence. They also will be able to counsel a car accident victim in regards to the states laws, including local if needed.

No fault states are a great way to reduce court costs and the costs faced by the state due to proceedings. Unfortunately, they do constitute a paradigm of the insurance model that’s a bit more difficult for people to understand. Just because the laws are more complex and shift more responsibility to the driver, however, doesn’t mean that fair compensation cannot be had. Finding the help of an experienced legal professional can do wonders after an accident in a no fault state.

Lisa Coleman shares what a no fault state is and how it can be difficult to file a claim within such a state, and encourages retaining a lawyer to help with the process. She recently viewed online how a dedicated Michigan car accident lawyer firm, The Stroble Law Firm, could represent and counsel a client who has been involved in a car accident in the state of Michigan, including counseling them to understand all their options when filing a claim in a no fault state.

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