What is no-fault auto insurance and which states have laws regarding it,
No-fault insurance as it pertains to auto insurance describes a policy in which holders recover their losses from their insurance, despite whether or not an accident is their fault. With that in mind, stricter no-fault policies apply only to state regulations that provide the payments for the policyholder and restrict the ability to sue. One may be able to sue under severe circumstances, although verbal agreements (or “thresholds”) and monetary thresholds under many no-fault laws don’t always hold up well due to people attempting to abuse their no-fault privileges.
Twelve states currently have auto no-fault insurance laws, five with verbal thresholds (Florida, Michigan, New Jersey, New York, Pennsylvania), seven with monetary thresholds (Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota, Utah). Below are some details on specific states and their respective state no-fault laws and regulations.
New York: Medical payments under no-fault New York personal injury protection are on the rise due to fraud. The abuse of these no-fault policies is resulting in hundreds of millions lost for consumers and insurers alike thanks to higher premiums, and predictions spell out that it’s only going to get worse. This fraud only drives up the cost and reliability of otherwise secure insurance. A proposed New York no-fault law is in place to deal with abusers by requiring those seeking benefits to provide greater and more detailed information concerning their treatments. Another proposal sees medical benefits put on hold until an insurer can deem them necessary. The main idea is to put a greater burden on those seeking benefits in order to deter them from further fraud.
Michigan: Michigan’s no-fault law offers unlimited personal injury protection coverage. The no-fault Michigan system is very giving and therefore very expensive. Claims in Michigan are higher than anywhere else in the country, 57% higher than average. Most of these expenses come from the medical field and a wide variety of costly procedures. The obscene costs have become a problem in the state which has become notoriously unaffordable by many residents. Current proposals ask for a change of personal injury protection coverage, meanwhile designating health insurance accordingly. Another proposal limits costly medical benefits (in-home care, for example) and rewards those who manage to get themselves taken care of.
New Jersey: Recently, the New Jersey courts ruled in favor of a fee schedule that would keep rising medical costs under control. The schedule lists maximum charges for common treatments that are often tied to auto accidents, setting well-defined boundaries on what insurers pay for care. The implementation of this no-fault New Jersey law took a fair amount of time and research at the hands of the New Jersey Medical Society, but looks to be a great step in the right direction for cutting unnecessary costs.
In addition to the states above, no-fault Florida laws are currently facing rising costs in the midst of their current legislation. No-fault laws change often, typically due to an abuse of the current system.