What is No-Fault Anyway?

I can't tell you how many times that I speak to people, and they say that their accident is a "No-fault" accident. Unfortunately, in New York, there is practically no such thing. Every accident is considered to be partially your fault. But that is another topic.

The no-fault law was established in 1974 to provide injured parties in an accident with sufficient medical treatment and income replacement without having to go through a lawsuit. Prior to no-fault, on 14% of liabilty claims reimbursed accident victims for their economic loss, and it took almost 16 months for people to collect the money.

No-fault provides what is know as Personal Injury Protection (PIP)Benefits. These are different from the injury lawsuits that you see the commercials on TV. Those claims are part of the liability protection that you carry on your auto insurance policy. PIP benefits provide "Basic Economic Loss" benefits for eligible injured parties. They cover medical expenses, income loss, other expenses incurred (e.g. housekeeping, transportation, etc.,) and a death benefit.

Because of this, your health insurance is secondary to your car insurance if you are injured in a car accident. You are also limited in suing somebody for these coverages. That is why it is important to make sure that if you are shopping for insurance, you compare ALL of the coverages that provide YOU and YOUR FAMILY protection.

Most direct companies will cut corners on these valuable coverages for several reasons. One is to claim that they can save you 15% or more in 15 minutes. They know that most consumers are only looking at the liability limits and deductibles. Another reason is to cut costs. Medical costs are rising at more than double the rates of inflation. A third reason is fraud. No-fault fraud has it's own industry in New York, and this industry knows the loopholes in the law.

So make sure you review your policy to make sure you have enough coverage if you were injured in an accident. Can you live on $2000 a month if you couldn't work? Would $50,000 be enough to cover your medical bills if you were taken to the emergency room in an ambulance.

Call me to review your policy to make sure that you have the right coverage. 888-900-2173