When searching for the best insurance rate, there are many different factors that need to be taken into consideration. Your insurance rate is not determined by state laws, but the methods each auto insurance company uses when setting your rates are regulated by the state. Each state has different auto insurance laws and requirements, and it is important to be well informed when choosing your auto insurance coverage.
Types of Auto Insurance Coverage
The primary types of coverage that most auto insurance companies offer are bodily injury liability, property damage liability, medical payments, uninsured and underinsured motorist, and physical damage coverage. When you are involved in an auto accident and file a claim with your insurance company, most insurance companies pay according to each party’s degree of fault. If you don’t agree with the insurance company’s evaluation of your claim you will have to file a lawsuit for damages such as lost wages, medical expenses, and pain and suffering. However, because this system can lead to long and costly court battles over which party was at fault and to what extent, some states have adopted no fault auto insurance laws.
No Fault Auto Insurance
Under no fault auto insurance, each person’s policy must pay their own the medical bills regardless of who caused the auto accident. Neither party has to prove fault before getting compensated for medical bills, rehabilitation cost and lost wages. However, in no fault states the injured party cannot sue the other driver for pain and suffering. If you live in a no fault state, you will have an additional section on your auto insurance policy called Personal Injury Protection. No fault auto insurance has several limitations. Insurance claims for physical damage to your car or its contents are still considered at fault claims. These types of claims are handled in the same way as those in a state with traditional auto insurance. In order to be paid for damage to your car, you must file a lawsuit against the responsible driver or file a claim with your own collision insurance. In addition, lawsuits can be filed for pain and suffering if your injuries and/or medical expenses meet a certain threshold. Each state has its own laws in regards to what threshold your claim must meet.
Quantitative Monetary Threshold No Fault Auto Insurance
Seven states, Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota and Utah, have quantitative monetary threshold no fault auto insurance laws. This means that the injured party’s medical expenses must meet or exceed a specific dollar threshold before they can file a lawsuit. The disadvantage is that it can encourage exaggerated medical expenses and, as a result, higher premiums.
Qualitative Verbal Threshold No Fault Auto Insurance
California, Florida, Michigan, New Jersey, New York and Pennsylvania, have qualitative verbal threshold no fault auto insurance laws. In these six states you can file a lawsuit if your injuries meet the criteria to be considered serious. Your claims must be documented in your medical records or proven by the length of your disability.
Add-On No Fault Auto Insurance
There are only three states, Arkansas, Delaware and Maryland, that have an add-on or optional no fault insurance law. In these states no fault auto insurance is an optional coverage. The plan will pay the benefits, but the driver can still sue and be sued for injuries, and pain and suffering. In Kentucky and New Jersey no fault insurance will automatically be assigned to you by default if you are not proactive when choosing your coverage.
How to Get the Best Rate on Auto Insurance
When shopping around for auto insurance you first need to decide which types of coverage you want. Next there are some simple ways to lower your rate such as raising your deductible, avoiding tickets, skipping the monthly bill pay option, getting a car alarm and improving your credit score. Finally, compare different auto insurance rates utilizing the Free Car Insurance Rate Finder tool at the top of the page. Auto insurance is an important financial obligation and it is vital to get the best coverage your money can buy.
Short Term Auto Insurance