By Michael W. Collins
It is common to see advertisements for car insurance everywhere. Whenever I watch television, I am bombarded by ads for Geico, AllState, and the like. However, in some states, including my home state of Massachusetts, we have what is known as "no-fault" car insurance.
The basic idea of no-fault car insurance is to avoid determining fault and dealing with the court system. This is done with the belief that settlements will be reached more quickly and that it will result in lower costs for all parties involved. "no-fault coverage is usually limited. It usually only pays for medical bills and lost income up to the limits of your policy. Pain and suffering and any expenses over the policy limits aren't covered."1
Despite lower overall costs when there is an incident, no-fault car insurance does not cover property damage. This may lead to lawsuits in order to cover the costs of repairs or replacement. Also, because fault is not determined in incidents, insurance quotes may be initially higher for policyholders.
No-fault insurance has many critics and supporters. Supporters tend to highlight how this type of insurance results in quicker settlement and does not place blame. Critics, however, believe that it de-emphasizes personal responsibility and essentially penalizes safe drivers by forcing them to pay higher fees than they would otherwise have to.