If you’re a driver in New Jersey, you’re obligated to have car insurance in order to operate your vehicle. But sometimes the ins and outs of car insurance can be a little bit confusing. When it comes to filing a personal injury or property damage claim after an accident, it may be unclear whether the claim needs to be filed to the other party’s insurer or your own. This is where no fault insurance becomes relevant.
The difference between traditional car insurance and no-fault insurance
The traditional model of car insurance tries to assign blame to an accident. And then the insurer of the at-blame party pays out for any damages and injuries associated with the accident.
No fault insurance operates under a fundamentally different model. Instead of worrying about who is at fault, a no-fault insurance policy obligates the insurer to pay out to the insurance policy holder regardless of whether that person was at fault for the accident or not.
The ramifications of no-fault insurance
If you have no fault insurance (which is required in the state of New Jersey), any claims you file will be to your own insurance company should you end up in an accident.
As a result, you may want to consider whether or not to file at all in the case of a very minor accident. Filing claims can have impact on the premiums you pay.
One of the benefits of no-fault insurance is that claims tend to be resolved more quickly, since there’s no need to determine who is it fault.
However, be aware that no fault insurance may not cover certain aspects of a liability claim that other forms of insurance do cover. Specifically, no fault insurance tends not to cover “pain and suffering” claims. You may have to go to court if you want relief from another driver in that respect.
No fault insurance is a type of insurance in which your own insurer pays out for any expenses related to a car accident, regardless of who is at fault. This can have different ramifications than having traditional insurance where fault determines who pays out.