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The No-fault Insurance Coverage or PIP – Coverage for the Liable Driver’s Injuries

Proving one’s capability to pay for injuries and/or damaged properties is a basic requirement for all drivers in the US. To this effect, all states mandate drivers to carry either the liability car insurance coverage or the no-fault insurance coverage (also called the Personal Injury Protection or PIP), that is, whichever their states require. If you've been in an accident contact

Liability car insurance coverage, which is based on the tort system (tort is a civil wrong resulting to legal liability of the party or person who causes injury or harm upon another), covers two aspects: bodily injury and damage to property. This type of insurance, however, will pay only the victim who has sustained injuries and/or whose properties have been damaged; the liable driver’s (or the policy holder’s own) injuries and damaged properties are excluded from the coverage.

Often, determining who the liable (or more liable) driver in an accident is, requires litigation in court. Meanwhile, the injured, who needs to undergo medical treatment immediately or who needs to have his damaged property repaired or replaced, will have to pay everything from his/her own pocket first, and will just have to wait for the compensation for the damages resulting from the accident – compensation that he/she may rightfully have a claim to only if he/she has been proven to be the victim in the accident.

As policy premium incorporates court fees, it is, therefore quite costly. While some drivers purchase a policy with a higher coverage, some drivers rather choose a policy with minimum coverage for less costly premiums. Minimum coverage (which differs among states), though, may prove inadequate if the injury sustained by the victim is severe or the damage to property more extensive. In such instance, whatever amount is lacking in the coverage will have to be paid by the policy holder from his/her own pocket.

The concern on allowing a driver, who caused the accident, to be compensated too if he/she gets injured, as well as to lower the cost of policy premiums by removing court fees, made 24 states adopt the no-fault insurance coverage during the 1970s. Through the no-fault system, injured drivers and/or passengers, regardless of whose fault the accident is, get/s compensated by their own insurance providers. This means fast compensation (as there is no more need for court proceedings) that will cover wages lost because of the need to recover from the injury, cost of medical treatment, and, in the event of death, funeral expenses. Damage to property insurance coverage will have to be purchased separately by the driver, though, since the no-fault system does not cover damaged properties.

By 2012, due to the high increase in the amount no-fault policies, just 12 states chose to remain with the no-fault system. Nine of these states, which require the no-fault system among their drivers, include Utah, North Dakota, New York, Minnesota, Michigan, Massachusetts, Kansas, Hawaii and Florida. The other three, Kentucky, New Jersey and Pennsylvania, allow their drivers to choose between the no-fault or the usual liability car insurance coverage.