With no fault insurance in place in different sectors including automobile, accident victims receive direct payments from the insurance company without the necessity of proving others negligence or fault. Therefore no fault insurance scheme puts fetters on the rights of the parties the right to sue for damages over the same cause or grievance. This leads to quicker settlement of accident claims without expensive and time consuming litigation.
The aim of no fault law is to provide basic medical coverage or treatment to victims of car accidents without the need to sort out beforehand who is guilty. This ensures some minimum coverage for the affected straightaway, regardless of fault.
However, this is not an escape route from liability for the negligent and guilty responsible for accident. The insurance company paying no fault benefit to the victims under the insurance policy carries out an exercise in liability determination so that it may in turn recoup contribution even from the at fault driver without insurance cover.
In 1971 Massachusetts was the first state in the USA to launch comprehensive no fault insurance plan. At present 13 states or jurisdictions have auto insurance laws that in some way restrict the rights of the parties to institute legal actions against other drivers and operators regarding matters taken care of under the insurance policy.
However, no state uses a pure no fault system. So states do this by permitting law suits in certain cases. For instance, the victim is allowed to file suit for compensation in case of exceptionally serious accident injury.
The terms and conditions of no fault coverage vary according to the state or jurisdiction in which the concerned vehicle is registered or insured.
Last but not the least, no fault claims have led to rise in the number of staged accidents to raise frivolous claims on insurance companies.
