What is a No-Fault Accident and Will it Affect Your Insurance Premium?

You may think a no-fault accident is an accident that was caused by situations that were not your fault.

An example of a no-fault accident would be running into a pot hole or losing traction on a sandy street. However, a no-fault accident can simply be an accident at which you are found to be the faultless party. If you are involved in a no-fault accident and you have to make a claim, you might be wondering if your insurance premium will increase.

This post will examine what the insurance is for and why it may cause your premium to increase.

What is a no fault accident?

A no-fault accident is simply an accident that's caused by anything other than you. This could be due to a flat tire causing you to lose control of the car, an oil slick in the road that causes you to lose traction and have an accident or you being hit by another driver.

No-fault accident insurance, also called PIP or personal injury protection insurance, covers damage to a car or person caused by a no-fault accident. A no-fault accident cover is an endorsement on most insurance policies and some states require a driver to have it.

These states include; Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah

Even if your state does not require it, there are many benefits to having a no-fault auto cover. Some of these benefits include being covered whether you're at fault for not and reducing the time it takes to file and receive a claim. The coverage also restricts lawsuits to only extreme injuries or death.

Will your Insurance Cover it?

The simple answer is yes, if you have no fault insurance. However if you don't have no fault insurance, it is up to your insurance provider whether they will pay out on the claim. Keep in mind that no-fault auto insurance doesn't pay for everything. There are some things that are not covered and there are some disadvantages to having this cover.

Some of these disadvantages include:

• No coverage for property damage or vehicle repair after the accident in certain states
• It only covers up to your policies max for your medical expenses
• Making a claim on your policy your premium can rise
• If your vehicle is damaged in a collision where you have no collision coverage your insurance won't pay out anything and you’ll be totally responsible for any repairs to your car or your person
• If you have limited collision coverage your insurance company won't pay out for any repairs to your car if you hit a person, another vehicle or a structure such as a building tree or pole. However if you are 50 percent or less at fault and you hit one of these items your insurance company will pay.
• You're only guaranteed a claim payout if you have standard collision coverage or broad form collision coverage.

There are benefits to having no-fault insurance but there are also disadvantages. Your premium will increase whether or not you are at fault of an accident with this cover. The best way to save money is to shop around for a good priced no-fault auto insurance policy with adequate cover.

Have any Houston auto insurance questions? Give Reliable Insurance Managers a call at 713-227-7283.