No Fault Auto Insurance

The concept of insurance is a very complex one, with many different insurance policies and their terms and conditions. Hence, in this article, instead of bamboozling you with some haywire financial and insurance literature, I have made an attempt to explain the concept of no fault coverage in a simple and straightforward manner. However before proceeding to the no fault auto insurance, state laws and their implementation, let us sit back, and take a moment to grasp the idea of no fault auto insurance and policies.

What is Auto Insurance?

The auto insurance is a type of insurance policy that covers the automobile of the policy holder. In case of an accident, the auto insurance company makes a full or partial payment to the holder of the policy. The holder of the policy, has to make timely annual installments to the auto insurance providers to keep the policy alive. The auto insurance policy sometimes also compensates some other party, when the insured party is at fault. Often especially in case of accidents, auto insurance companies also covers the medical expenditures of the injured party. All these factors must be however mentioned in the terms and conditions of the insurance policy. During these policies the cause of the accident, fault or carelessness, are some of the important things that are considered by the insurance company before making the compensation. However, that is almost reverse in a no fault auto insurance policy.

No Fault Auto Insurance

A no fault auto insurance is very different type of insurance policy where many different aspects of auto accidents are covered by the policy. The compensation is basically provided to all aspects of the accidents, especially the medical expenses, that have to be fulfilled almost instantly. The concept of no fault auto insurance, is often misunderstood by many people. The no fault insurance, does not mean that the insurance companies will totally ignore the fact that some person or party was at fault. The merit of the no fault auto insurance lies in the fact that it provides almost instant financial backing for the policy holders. Here's some detailed explanation...

Most of the auto insurance companies, wait till the court proceedings have taken place, and the party at fault has been established, before giving out the compensation for the appropriate expenditures. The basics regarding the payment of premium, of the no fault policy are the same, but the response system of no fault auto insurance company is different, much more quicker. The insurance company provides instant medical coverage to its policy holder and other expenses such as towing the vehicle and starting its repairs is financed by the company. Another very wonderful aspect of this policy is that it also provides coverage of emergency medical facilities to other parties. After the hearing takes place the auto insurer of the no fault policy decides if its policy holder deserves additional compensation or not. If the policy holder has been at fault in the accident, the annual premium is increased according to some specified formula, as the company now classifies the policy holder as a 'high risk driver'.

In some states, the no fault auto insurance has been made a compliance and requirement for all drivers. Some such states include, Florida, New Jersey, Kentucky, Kansas, etc. In fact this kind of policy is an excellent one and if one lives in a high traffic zone, a cheap no fault auto insurance, might prove to be useful.


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