How Does No-Fault Car Insurance Really Work? By Anthony Peck At Isnare.com Ezine Articles

No-fault car insurance is among the most misunderstood types of insurance coverage floating around on the market today. Visitors to no-fault states like New York are often befuddled at the idea of an accident where no one's at fault. If no one did it, then who gets to pay for it?

Before we go too far into the second half of that question, let's take a look at the first. It's absolutely impossible to have an accident for which no one is responsible. Even if you hit a deer or slid off an embankment in the middle of a snowstorm, there's someone responsible. Someone did it, and someone is going to suffer the consequences of that in potential traffic tickets and almost certain increases in their car insurance rates.

No-fault car insurance just shakes up the fiscal responsibility end of that a little bit. Rather than spend months hashing out who was responsible, hammering out the details of paying claims and facing lawsuits when drivers try to drag their feet about admitting whether the accident was actually their fault or not (which, believe it or not, happens far more often than you might think), no-fault drivers just sit back and let their own car insurance companies take care of it. It doesn't matter who actually caused the accident, each driver is going to be taken of by their own insurer. This lets them get back on the roads as quickly as possible, and it keeps the courts clear of hundreds of traffic disputes each year.

Even though their insurance company is footing the bill, the driver not responsible for the accident isn't going to see any change in their car insurance rates afterward. Nobody's that crazy! The driver that did cause it, on the other hand, is probably going to watch their rates fly through the roof after the accident.

No-fault states still require drivers to carry liability car insurance, which completely confounds some drivers until you think about the cost of getting health care in today's over-inflated environment. Costs are rising rapidly, and with ICU costs starting at $5,000 a day and an almost limitless potential for disaster with the cost of rehabilitative therapy after an accident medical bills can fly sky high-well beyond the limits of traditional health insurance coverage and possibly even beyond that of personal protection.

At that point most judges will allow the victim to prosecute the driver responsible for the accident for the difference between their coverage and their expenses. This is where liability comes in. Most experts recommend that you carry a minimum of $100,000 per person and $300,000 per accident in liability car insurance to cover any medical expenses associated with accident. It's your best chance to keep your financial assets safe while still living up to your responsibilities.

No-fault car insurance isn't as complicated as it seems-and can, in fact, make life a lot easier when you're talking about what you're going to have to do to get your life baack on track after you've been in an accident.

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