Auto Insurance: You Should Know This

2020 must have been a busy year for every car accident lawyer. While fewer vehicles have been on roads due to pandemic restrictions, there were about 42,060 deaths from road crashes, eight percent more than in 2019. There were also 4.8 million people who obtained serious injuries from car crashes.

Because there are always road accidents involving vehicles, car insurance is required by law for every vehicle owner. Navigating the details of car insurance coverage and what they mean in case of an accident can be complicated, though. You also need to know the specific types of insurance required in the state you will be driving in.

Tort Vehicle Insurance Claims

In 38 states of the U.S., tort vehicle insurance is the requirement. Under this type of insurance, the insurance company of the driver who is at fault in the accident pays the other driver. Payment can cover damages to the vehicle, medical expenses, wages lost, suffering, and other potential costs in the future.

Tort insurance can be full tort or limited tort. Under full tort insurance, which is more expensive, a driver can sue the driver at fault for suffering, which covers physical pain or discomfort, emotional pain and its treatment, and stress and anxiety caused by the accident.

Under limited tort insurance, a driver or his family can only sue for serious damage to bodily functions, permanent disfigurement, dismemberment, and death. The driver is still automatically covered for medical bills, though, through a personal injury protection (PIP) policy.

Damages for suffering are usually calculated by taking the sum of all medical bills and multiplying this by a factor between five and 1.5. The factor depends on how severe the injuries are, the effect on the family, and the extent of the other driver’s fault.

Types of Driver Faults

In terms of vehicle insurance, a driver’s negligence means fault. The types of negligence recognized, and their definitions, vary by state. Under negligence that is “pure contributory,” if the driver at fault can prove that the other party contributed even slightly to the accident through negligence, then there will be no payout at all. This type of negligence is recognized in Virginia, North Carolina, Maryland, Washington D.C., and Alabama.

Under negligence that is “pure comparative,” the payout from the insurance company depends on percentages of fault. If the court determines, for instance, that the other party was 25 percent negligent, then the insurance company of the driver at fault will pay only 75 percent of the claim. This type of negligence is recognized in Washington, Rhode Island, New York, New Mexico, Missouri, Mississippi, Louisiana, Kentucky, Florida, California, Arizona, and Alaska.

All other states recognize negligence that is “modified comparative,” which means that there is a limit which varies by state but is usually between 50 to 51 percent. If the court finds that the other party was negligent to this extent, then the insurance company of the driver at fault will not pay anything. All other states recognize this system.

It is important to know the types of negligence and their definitions in your state and in any state that you will be driving in. You must also learn all the traffic laws in the state, such as whether cyclists must stay in certain parts of the road.

woman taking picture of car crash

No-Fault Vehicle Insurance

Under no-fault car insurance, you must get a PIP policy. In case of an accident, regardless of who is at fault, each driver files a claim against his own insurance. A driver cannot sue the other driver for suffering. Some states allow a driver to sue the other for bone fractures, disfigurement, dismemberment, fetal loss, or death. Some states also allow a driver to sue for wages lost or financial losses once these exceed a certain limit.

The states with no-fault auto insurance are Utah, Pennsylvania, North Dakota, New York, New Jersey, Minnesota, Michigan, Massachusetts, Kentucky, Kansas, Hawaii, and Florida. Among these, Pennsylvania, New Jersey, and Kentucky allow drivers to choose to get full tort insurance instead, although that will cost more.

No-fault insurance is more beneficial for the insured in terms of receiving money sooner for medical treatments and vehicle repair. It is also supposed to be cheaper because insurance companies do not have to go through court, and these savings should lower insurance rates. Vehicle owners still end up paying more, though, because of the requirement for a PIP policy.

Factors that Affect Insurance Rates

Other matters influence the rate of your auto insurance. For instance, since more men are in vehicular accidents, the rates for men are usually higher than those for women. In the same vein, your track record in driving largely determines your rate. Previous accidents and serious violations will increase your rate. Being a new driver with no track record will also mean a higher rate, though.

Car insurance rates are higher in urban areas because of the higher risk for accidents, theft, and vandalism. They are higher for cars that are more expensive, and vehicles that will cause more damage in an accident.

Since you have no choice but to get mandatory auto insurance, the most that you can do is to work on matters you can control. Drive safely, do not commit violations, and choose a less expensive vehicle.

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