Personal Injury Laws and Auto Insurance

If a motorist sustains injury as a result of a road traffic accident, there are essentially two different ways in which they can be compensated. There are two different systems in place throughout the United States with regards to auto insurance and these are known as the Tort system and the no-fault system.

Tort States

When a breach of legal duty occurs that leads to bodily injury, a tort is committed. In effect, the person deemed to be at fault in an accident is legally obliged to compensate any third parties who may have had harm inflicted on them. This usually comes in the form of a financial payment and a valid insurance policy will carry a minimum level of liability coverage that has been previously set by state law.

No-Fault States

The alternative to the Tort system is the no-fault system. In states that apply this particular method, responsibility isn’t an issue when an accident occurs as individual drivers are expected to make any claims for bodily injury from their own insurance carrier. However, accidents of a serious nature that cannot be compensated by a minimum level of mandatory insurance can still result in legal action although such circumstances are now particularly rare.

Tort System Vs No Fault System

The Tort system usually offers larger levels of compensation to the victim although this will usually come at the expense of the taxpayer. In some instances, payouts can be cancelled if proof of liability cannot be confirmed. The no-fault system can actually be more efficient as lawsuits rarely occur but compensation payouts are usually much lower.

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