Are No Fault States Better For High Risk Drivers
Auto insurance policies vary greatly from state to state. Some states, such as Oregon, require that all drivers carry a minimum of $25,000 in coverage for damage done to another person’s property in an accident. Others, such as California, require only $5000. As well, there are wide divisions on how much bodily injury (BI) and personal injury protection (PIP) coverage are required by law, and some states simply do not mandate any coverage for under-insured and uninsured motorists. The different levels of coverage required in each state can make a significant difference in any auto insurance quote or auto insurance premium that a consumer will receive. In addition, each state has different legislation regarding how claims for auto accidents can be pursued. Bearing this in mind, is there a state in which a high-risk driver would be better off calling home?
First, it is essential to understand the litigation options open to individuals in various states. Put simply, there are two models currently operating in the United States. In the first model, one driver must be declared at fault for the accident. Depending on the specific legislation, a driver may be found wholly responsible, or responsible for only a percent of the damages caused, and may have to pay out entirely, or for only a fraction of the total cost. The second model is what is known as no-fault.’ In no-fault states, neither driver is identified as being wholly responsible, and there is no ability for drivers to sue each other to recover costs. Some states offer a partial no-fault model, in which drivers can choose to either pursue damages in court or agree not to do so, but the decision must be made before a car is put on the road.
A high-risk driver – one who has had a history of accidents or just bad luck – would do well to find a no-fault state. Although they would pay a significantly higher auto insurance premium, as coverage levels in no-fault states are mandated at much higher levels in order to cover motorists as they cannot pursue a court settlement, any accident would simply be dealt with at an insurance level and never move on to the potentially time-consuming and expensive process of court.
There is a wide variance in auto insurance rates by state, in addition to significant differences in how claims are handled – from the entirely litigious options of an at-fault state to the simple and easy insurance payouts of a no-fault state. For a high-risk driver, a state which has high required levels of coverage and no-fault legislation is often the best option, as they will have a better chance of finding a reasonable auto insurance quote.