What is No-Fault Auto Insurance?

Having Houston auto insurance is compulsory nowadays. In some states, the insurance policy may include a no-fault clause, which puts a limitation on your right to sue the other party or driver who is liable in an auto accident. With a no-fault insurance policy, the insurance provider covers the expenses regardless of who is held responsible for the accident. It is very important to read the policy carefully to determine the provision of the carrier. This allows you to know if you may still have obligations for some expenses.

Basic Premise
The amount and type of auto insurance required to drive legally varies between states. No-fault auto insurance, also called Personal Injury Protection (PIP), provides coverage for the damaged vehicle as well as the medical expenses. However, if physical injuries pass either the monetary or verbal threshold, you have the right to sue the person liable for the accident. Monetary thresholds refer to the total amount of medical expenditures verified by your insurance provider. A verbal threshold is intended for severe injuries which resulted in death or permanent damage.

Benefits
No-fault insurance provides coverage for bodily injury regardless of who is at fault. This lowers the cost of lawsuits, settles claims instantly, and decreases the cost of insurance. Typically, an individual is covered for funeral costs, compensation of death benefits, and loss of income. No state totally prohibits you from suing a person who is responsible for damages, if you meet the monetary or verbal requirements. Nevertheless, having PIP coverage prohibits you from prosecuting the other party to prove liability.

Drawbacks
If you suffer from injuries as a result of negligence of the other driver, you can't sue him, even if he/she has a record of accidents. While insurance rates in those no-fault states are typically lower, they may become higher, as the drivers often have to sue their own insurance provider for the settlement of claims. This is due to the fact that insurers may find out that expenditures are excessive. Moreover, if an individual fails to meet monetary and verbal threshold, he/she doesn't have the right to sue to recover damages for emotional distress or for excessive medical expenses that his/her insurance provider will not cover.

If you have any questions about the process of obtaining a no-fault auto insurance, give a Reliable Insurance Managers agent a call at 713-227-7283. We can help you understand how your policy works as well as make it affordable for you.