No-Fault Accidents
Posted by: Susan Murphy

The Impact of No-Fault Accidents on Insurance Premiums: Legal Perspective

A video online showing a blue SUV crashing into a pole has caused many arguments about whether insurance companies can increase premiums in no-fault accidents. Usually, when an accident occurs, someone is to blame, and premium increases are the norm. On the other hand, some accidents are regarded as “no-fault accidents,” meaning that the insurance provider cannot blame one person.

Every state has its guidelines for determining fault. There are no-fault states and at-fault states. Understanding how your state assigns fault in an accident is crucial because it might influence the kind of insurance coverage you need for your vehicle and how a claim will be handled if you are involved.  This article will cover how premiums change when an insured has damages due to no fault of their own. 

No-Fault Accidents
No-Fault Accidents

Using the video, Lawyer Ugo Lord affirmed that your auto insurance premiums won’t increase due to a no-fault collision. If you watch the video carefully, you will see a black vehicle attempting to cross the streets on a two-way stop. Because it is a two-way stop, it means that the blue SUV had the right of way.

Consequently, when the black vehicle failed to yield to the blue SUV, it became a hit-and-run. According to Ugo Lord, the insurance company cannot legally raise the premiums for the blue SUV because it was a no-fault accident. 

Meaning that the insurance carrier cannot use this accident against the driver because it was not his/her fault. However, premiums can go up for reasons unrelated to the accident.

If a No-Fault Accident Occurs, Under What Circumstances Does Your Insurance Increase Your Rates?

Insurance companies typically consider several things before raising your insurance rates following a car accident. Some of these include:

  • The extent of property damage and bodily injury sustained. 
  • The identification of the at-fault party and your past interactions with your insurance provider, including the duration of your policy, the nature of prior claims, and the timing of those interactions. 

Generally speaking, your insurance price won’t be significantly impacted if no claims have been filed against your coverage and you aren’t named as the party at fault. Also, your auto insurance provider may be responsible for compensating you for any injuries and damage you suffer if an uninsured driver strikes your vehicle. 

This coverage protects you from monetary losses caused by the at-fault driver’s lack of sufficient insurance. Your auto insurance company may raise your premiums to cover the additional expenses other than the collision (such as medical insurance), even if you are not at fault.

What Does a No-Fault Accidents State Mean?

A no-fault state means that if you are involved in an accident, you must seek compensation from your insurance even though you are not at fault. In an at-fault state, the insurance of the driver who is at fault for the accident will pay for all parties involved, including medical costs and property damage. 

Examples of no-fault states in the United States are New York, Kansas, Florida, Hawaii, etc. Drivers in states with no-fault insurance must have Personal Injury Protection (PIP) coverage. 

The other driver’s insurance is only relevant if your medical bills exceed your policy’s limitations. However, the at-fault driver’s insurance covers vehicles and any other damaged property.

In a No-Fault Accidents State, Is It Possible to File a Lawsuit for a Car Accident?

Yes, it is possible in some situations. You can sue if:

  • The accident caused medical fees that were above the legal threshold or
  • The accident resulted in a “severe injury,” as defined by the law.

States have different standards for what constitutes a severe injury, but generally speaking, serious injuries involve deformity and major or permanent damage to bodily functioning. For instance, a fracture injury in New York is considered serious.

Also, the threshold for accident-related medical bills is different in every state. It can be as low as $3,000. Nonetheless, you should always report to the appropriate authorities whenever you get involved in an accident, even if you are not at fault, and also make sure to have evidence. 

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