Liability insurance is your main financial defense against catastrophic damage you might cause to others or their property. But it's not always clear who's to blame for an accident, and proving fault, when it is possible, can entail delays and expensive legal action. Meanwhile, the victims may not get paid.
Enter no-fault insurance, an attempt to take the fault out of liability. The idea is to have accident victims' medical expenses paid by their own insurance companies, regardless of who is to blame for the accident, thereby eliminating the costs and delays of legal actions.
No states currently function under a pure no-fault system. Instead, several states have adopted a modified no-fault system. Some of those states have adopted "add-on" plans that increase the benefits you can obtain from your own insurance company but do not restrict your right to pursue a liability claim. No-fault laws vary greatly, but they do tend to have some elements in common.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
- Your insurance company pays you and others covered by your policy for medical bills, lost wages, the cost of hiring people to do household tasks you are unable to perform as a result of injuries, and funeral expenses up to specified limits.
- No-fault plans don't pay for property damage. This is covered by other parts of the policy.
- No-fault plans don't pay for pain and suffering. For that you have to be able to sue someone.
- You usually can't sue others until expenses of the type covered by the no-fault insurance exceed a certain level. By the same token, you are immune to suits by others until their costs exceed that limit.To protect themselves against fault-based suits permitted under no-fault regulations, drivers in some states must also buy traditional liability insurance. But liability payments may be reduced by compensation received under the no-fault provisions.Add-on no-fault plans generally provide benefits similar to, but less generous than, the pure no-fault programs, and the injured person has the right to sue for pain and suffering.
-
Why Walmart Stock's a Buy After Its Beat-And-Raise QuarterWalmart is the best Dow Jones stock Tuesday after the retail giant's solid earnings report and outlook and Wall Street thinks it's just getting started. Here's what they're saying.
-
Premium Tax Credit: Are You Eligible For This Health Insurance Tax Break?Tax Credits The tax credit can help qualifying individuals pay for coverage from the Affordable Care Act’s health insurance marketplace.
-
Will lower mortgage rates bring relief to the housing market?The Kiplinger Letter As mortgage rates slowly come down here's what to expect in the housing market over the next year or so.
-
Car Prices Are Finally Coming DownThe Kiplinger Letter For the first time in years, it may be possible to snag a good deal on a new car.
-
New Graduates Navigate a Challenging Labor MarketThe Kiplinger Letter Things are getting tough for new graduates. Job offers are drying up and the jobless rate is increasing. Are internships the answer?
-
When's the Best Time to Buy a Domestic Flight? The Kiplinger LetterThe Kiplinger Letter A new study by CheapAir.com has crunched the numbers.
-
Woes Continue for Banking Sector: The Kiplinger LetterThe Kiplinger Letter Regional bank stocks were hammered recently after news of New York Community Bank’s big fourth-quarter loss.
-
Anxious Flyers Take Note: The Kiplinger LetterThe Kiplinger Letter Whether it's the routes to avoid that have the most turbulence or the safest airline, we've got you covered.
-
The Auto Industry Outlook for 2024The Kiplinger Letter Here's what to expect in the auto industry this year. If you’re in the market for a car it won’t be quite as daunting as it was during the pandemic and after.
-
Two More Travel Trends for 2024: The Kiplinger LetterThe Kiplinger Letter As the world gets moving again, two more travel trends to consider: Solo cruising and airline passengers with loaded guns.
