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Home > Articles > No Fault Insurance

No Fault Insurance

Due to the combination of the rising costs of car insurance and poor driving habits, no fault car insurance was created. This type of insurance is described as a contract where the insured parties in an accident are compensated for losses by their own insurance companies, regardless of who was actually at fault in the incident. In this way, it is similar to first-party insurance coverage.

No fault insurance goes beyond the realm of first-party coverage in that it prevents a driver from seeking reimbursement via the court system for losses caused by other parties in the accident. The driver is reimbursed by the driver or policyholder’s own insurance company without proof of fault or innocence but the driver is then barred, frequently, from the civil justice system.

The rationale for this banishment from the courts is that litigation is expensive and raises premium rates. By keeping the parties out of the courtroom, no fault insurance, in theory, lowers the cost of car insurance and also provides quick payments to the injured party. Each insurance company covers their own driver and charges their own driver higher premiums.

The critics of no fault insurance feel that this type of premium does little to punish reckless or negligent drivers and does nothing to reward a party that was not actually at fault. The reckless or negligent drivers get away with raised premiums and a higher risk rating, a slap on the wrist considering the harm they could potentially do, and are not punished via jury awards or settlements.

Contact a Milwaukee Car Accident Attorney

If you have been injured in a car accident, contact a Milwaukee car accident attorney from Habush Habush & Rottier S.C. ® at 800-242-2874 to discuss your case and to determine your legal options.

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