Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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UPDATED: Oct 19, 2021

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Here's what you need to know...

  • Fault claims are legal judgments made by the attending police officer and include any citations filed against you
  • If you are ruled at-fault, you may be liable for damages outside of the coverage limits of your insurance
  • The police report is filed with your insurance company, which affects your premiums
  • Your insurance company may be required to pay for damages if you are at-fault in an accident, which may raise your monthly premiums

Even if you think you have adequate insurance coverage, it helps to shop around and see if you have enough. You may worry that you could be considered at-fault in an accident. It is important to understand what the criteria is for being at-fault and what is meant by a fault claim.

Having this information is the first step to avoiding misunderstandings if you are involved in an accident. It will also help you to know your rights when you are found at-fault and give you some legal recourse on what to do about it.

What is a fault claim?

A fault claim is a legal statement that states who was at-fault in an accident. Sometimes no one is ruled at-fault, as in the case of an event that could not be avoided (like black ice, for example) that is not visible. But in cases of negligence (where you could have avoided it but made a mistake), you may be ruled at-fault.

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What is no-fault auto insurance?

No-fault auto insurance is insurance that is designed to pay personal injury claims that may arise from an accident in which you are ruled at-fault. It may include personal injury protection coverage, medical costs arising from the accident, and other expenses that arise, even if it was your fault.

In this way, no-fault insurance protects you legally if you cause injuries that surpass what your normal car insurance would cover.

Benefits of No-fault Auto Insurance

The benefits of no-fault auto insurance include the fact that the accident may not go on your accident record as being your fault if you carry this type of insurance.

Additionally, your insurance premiums will not go up like they would if you did not carry this insurance.

Finally, you are less likely to be sued for damages if you carry this type of auto insurance because the extra expenses are covered with the insurance from personal injury.

What is a personal injury case?

Sometimes an accident turns into a legal nightmare. When you injure people or severely damage their property due to your negligence, you may be responsible for paying for those damages.

You need to avoid having to go to court with a personal injury case if you can because the result can be very costly. Personal injury cases arise when someone files suit against you claiming that you caused them bodily injury or other kinds of personal injury.

If you lose such a case, you may be liable for any or all of the following damages:

  • Personal physical injury amounts
  • Medical expenses of injured parties
  • Damages for “pain and suffering” (punitive damages)

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How does no-fault insurance work?

After an accident, if you are carrying no-fault insurance, your insurance company will process your claim. If you were ruled at-fault, your normal insurance would pay for the damages as long as they are minor.

But if you have no-fault insurance, you will not have to worry if the damages or injuries are more serious.

In a way, no-fault insurance negates the need for an auto insurance settlement if you are carrying a good policy that covers everything.

People may still sue you for further damages but no-fault insurance can cover you when your normal car insurance does not. It often picks up where your regular insurance leaves off.

Five Tips for Finding the Best No-fault Insurance

  • Shop around and compare insurance policies to see what the exclusions and limitations. Only by trying out the various policies and companies will you start to see which one fits your needs.
  • Find out what the no-fault insurance limit is in the event of an accident. You need to know the exact amount that you will have access to if damages are more than you thought.
  • Remember that in a no-fault case; you will still be cooperating with your insurance company. This means that you need to make sure your main insurance plan is a good plan as well. The no-fault insurance plan will kick in when your main insurance is not enough to cover the costs.

Statistics on Auto Accidents Involving Fault Claims

The statistics on accidents in which there is a fault claim are staggering. According to the National Highway Traffic Safety Administration, U.S. vehicle collisions in 2010 cost close to $1 trillion in loss of life and productivity.

In another study, the ISO found that the average liability claim for bodily injury was over $15,000. Research also revealed that private insurance companies pay about 50 percent of these damages, leaving the rest to be paid by individuals and third parties, such as charities and health care providers and other benefactors.

If you drive frequently, your chances of being involved in an accident in which you could be ruled at-fault on damages is significant. The more you drive, the better your chances for an accident that could be ruled your fault.

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What do I do to get started?

If you have concerns about the possibility of fault claims or if you worry that you might be cited with a fault claim, it pays to do some research on no-fault insurance. Also, you may want to check your current policy to see what your limits are on the normal coverage.

With insurance, you should always weigh the risk of loss and damages with the amount of premium you pay monthly.

If you often drive or use your vehicle every day in busy traffic, you may want to consider changing some things on your policy.

Purchasing No-fault Car Insurance

Your best line of defense against having to pay for personal damages, injuries, and other expenses if you are at-fault in an accident, is to check your current car insurance to see if you have enough coverage. Next you should look into no-fault insurance and do your due diligence to see what is best for your situation.

Remember, the more you know about how the process works, the better educated you will be in regards to your rights and what you can do if you are named in an auto insurance fault claim. Preparing for it before it happens is your best choice.

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