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Following a car accident, the most important thing for those affected is often to get reimbursed for their losses, such as medical bills and car repairs. And, almost always, it is car insurance companies that get involved, trying to figure out not only how much they are going to pay out, but also which company should be paying. This question of which company paysâ€"your own insurance company or the other driver’sâ€"depends on the insurance laws of each state and, most importantly, whether it is a state that uses “no fault insuranceâ€. So what exactly is “no fault insurance†and how is it different than regular insurance?
Normally, which insurance company paysâ€"yours or the other driver’sâ€"and how much they pay depends on who was at fault for causing the accident. If you were at fault, then your insurance company pays. If the other driver was at fault, then their insurance company pays. And, if both of you were at fault in some capacity, then the insurance companies try to figure out an accurate division of responsibility and they pay accordingly. As you can imagine, all of this determining “who was at fault†can take some serious time to resolves and is in fact a huge part of litigating car accident cases.
No-fault insurance attempts to bypass this messy “who did what to whom†fight. Instead, if you carry no-fault insurance, sometimes called Personal Injury Protection insurance, and you get into an accident, your insurance company will pay you, up to the limits of your policy, no matter who caused the accident. Typically, this type of insurance coverage will pay for only your personal injuries, and any property damage that might have happened to your car is not covered.
Most states, including California, do not use the no-fault system of insurance. Instead, California law requires drivers to carry insurance that will cover the costs of an accident that they are at fault for. This is the “financial responsibility†way of thinking about car insurance: if you are going to drive a car, then you need to have the financial ability to pay for any damage you might cause to others.
So, at the end of the day, no-fault insurance helps to answer the question of whose policy covers whose injuries. A no-fault insurance policy will cover your injuries no matter who caused the accident. A financial responsibility policy will cover damage only if the policy holder was at fault.
Demas & Rosenthal remains one of Sacramento’s most highly respected and accomplished personal injury law firms. We’ve been successfully representing clients for almost twenty years. Every Demas & Rosenthal attorney takes great pride in obtaining the full compensation and complete justice owed to every client.
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