How The No Fault Insurance System Works

by Runs With Scissors

From California to Rhode Island, no fault insurance plans are already a law which unfortunately is not accepted by a well organized and well financed lawyer’s lobby. The no fault proposals according to the American Trial Lawyers Association prohibit people from recovering from the injuries that they acquired which really do not have a certain monetary value.

The ones who are affected by these limitations are those victims who seriously try to settle claims without the help of the court and those who file a case to redeem damages. In Illinois, the trial lawyer’s group spent 0,000 in an unsuccessful lobbying effort to have the bill killed.

The no fault proposal was immediately opposed by the Illinois Trial Lawyers Association wherein this organization filed a suit right after the no fault proposal has been declared as a law.

Since specific groups of accident victims are being discriminated by the new law, the State Supreme Court recently declared it unconstitutional. As what the group of lawyers in Arkansas and California disputed that no fault bills refrain persons from bringing their problems in court.

This pending bill that does not allow people to sue and that it does not allow lawsuits from recovering from the damages done has not been approved by the Trial Lawyers Association in New York.

The counter of trial lawyers is beginning to put their acts together. The Federal Automobile Insurance Reform Act is what they are preparing to introduce to the Congress wherein this would maintain the tort damage lawsuit right or could be referred to as the more extreme ‘no fault’ version.

A customized no fault provision is owned by the trial lawyers’ bill. Earnings from the national gasoline tax will be used in a productive way by the new Federal government corporation for it will serve as compensation for the auto accident victims. All of them would receive something whether they were guilty or innocent or whether they were insured or not.

The judgment against a guilty driver and his insurance company would not affect the way how the court will deduct from the amount taken from the government firm, though there would still be the right to sue and collect from the guilty driver.

Not only do these guilty drivers want to retain the wrong legal system, but they also see the no fault system as a reasonable social welfare principle, not as an insurance gimmick that is why they are no longer bothered by this scheme, explained by the general manager of the Trial Lawyers Association and professor of the Boston University Law School.

Trial lawyers very much think that around 90 percent of all personal injury auto claims would be able to shoulder by the federal corporation.

That fact plus the big government paid deductibles obviously would drive rates for injury liability insurance down sharply. Most states probably ultimately would make such coverage compulsory. If that happens, the government would then have to spend over ,000 or more per person.

This amount which will be immediately received by victims will then be covered in full of about 90 percent of all personal injury claims which includes medical care, hospitalization costs and loss of income.

Drivers who are drunk, taking drugs, driving without license and those who have committed a violation under the law will not receive immediate payments.

The Trial Lawyer’s bill serves as a competition to the private insurance companies because the government is now allowed to sell insurance policies, however, this bill does not have anything to do with the current collision, property damage liability and auto fire and theft insurance system. Because of this, private companies will compete with the Government Company. But there would be no change in the way motorists pay for such coverage.