Insurance Jargon Demystified: No-Fault Insurance – Part 2 of 3

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Insurance Jargon Demystified: No-Fault Insurance – Part 2 of 3 on avanteinsurance.com

How ‘no fault’ laws affect drivers differently in different states

More than 10 states have ‘no-fault’ insurance laws. This means that injured drivers will be making a claim against their insurance company– whether they’re at fault for an accident or not. However, no two state’s no-fault laws are the same. Some state laws have limits that restrict the amount of damages that can be claimed, yet in other states, the claim amount is unlimited.

How exactly do ‘no fault’ claims work in real-life?

A personal injury claim, otherwise known as a PiP claim, is a claim that an insured individual makes against their insurer. This will reimburse a driver for both their medical claim amount and the income they lose, up to the state’s limit (if there is one). In states with a two-part medical claim limit, for injured drivers with health insurance, the medical insurance firm will usually pay most of the medical bills. The no-fault insurance company will then pay the outstanding amount.

Injured drivers without medical insurance may be left high and dry in states with claim limits

While individuals with private health insurance may not have to worry much about paying the remaining amount of their medical bills in no-fault states, uninsured individuals in states with no-fault claim limits may have to pay for a large amount of costs out of pocket. Those without any kind of insurance are ‘responsible for working out payment arrangements with your doctor, hospital, clinic, or other healthcare provider.’ If you do not have private health insurance, but have Medicare or are insured through a Medicaid-sponsored public state insurance program, these programs will also cover the outstanding portion of your medical bills.

No fault claim regulations usually mandate that an insured individual cooperate with their insurance company

In states where the at-fault driver’s insurance company is responsible for paying out injury and lost wage benefits to the not-at-fault accident victim, cooperation is almost never required to process a claim. However, things are substantially different when you’re trying to get a payment from your own insurance company– and unlike dealing with an adversarial insurance firm, you’ll often need to provide a significant amount of private medical information.

That means that you may need to submit to an insurance company medical exam, and that you’ll need to provide access to previous medical records, potentially including a list of all healthcare providers you’ve visited in recent years. Individuals are usually required to list healthcare providers, even those that have nothing to do with getting medical treatment for the accident at hand. This is so insurance companies can verify that an accident caused injuries themselves, and that the firm is not being asked to pay to treat injuries or disorders that happened or developed at a previous time.

While many insured people don’t like the idea of handing over some of their most personal information to an insurance company, refusing to do so can have serious financial consequences. Most no-fault states allow insurance companies to completely void and cancel insurance policies if their customers do not cooperate in the investigative process after an accident.

Check all important state laws and regulations whenever buying or changing an auto or health insurance policy

No matter where they live or what kind of car they drive, smart drivers want to make sure that they’re protected in the case of disaster. Unfortunately, car accidents can cause tens or hundreds of thousands (and sometimes even millions) of dollars’ worth of medical costs and lost wages.

In no-fault states, especially those with claim limits, drivers without health insurance can easily find themselves in a financial bind if a serious accident occurs. Therefore, it’s essential to do your research and make sure that your policies provide sufficient coverage. Neglecting to do so can cause serious financial trouble and make it difficult to get your life back after a serious car crash or other vehicular accident.

To learn more about how to make sure you and your family stay protected, on and off-road, contact Avante Insurance today for a free consultation.