News: No fault auto insurance in New York for 2009

Jeff Walker (New York): I live in New York and am a teenager. I want to know what “No fault” insurance is and whether or not this would affect my auto insurance?

Response: A very interesting question. The main intent for brining in “No fault” insurance was to enable cheap auto insurance rates. Normally the auto insurance rates increase due to the expense of loss or car insurance claims payments and legal expenses for settling the claims. To avoid legal payments No fault was accepted by many states like Colorado, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah. The more the insurance companies save on auto insurance expenses the more cheaper auto insurance rates can be.

When you have an accident under a no-fault system, your insurer automatically pays for your damages, regardless of fault (up to the specified policy limit). In exchange for this guaranteed payment, you must give up some of your rights to sue the other driver involved in the accident. There are elements of no-fault in all auto insurance coverage. For example, medical payments and property damage are typically paid regardless of fault.

Here the intent of No-fault insurance is to reduce auto insurance premiums by reducing the number of automobile accident cases in the courts, by restricting recovery for pain and suffering damages, and by providing limited payment for losses.

However, for New York, as per the latest as per the Insurance Information Institute (III), New York’s auto insurers saw their typical no-fault payment for the medical care of accident victims rise by 56 percent to $8,748 per claim in the second quarter of 2009. In late 2004, the average no-fault payment stood at $5,615 per claim.

In a speech to the New York Insurance Association (NYIA) this week, Robert Hartwig, the group’s president, said the insurance industry, the New York State Insurance Department, National Insurance Crime Bureau and law enforcement agencies continue to investigate suspicious claims vigorously, but loopholes in the no-fault system make it particularly vulnerable to what he described as “fraud and abuse by a ‘no-fault industry’ of corrupt medical professionals, attorneys, and street-level criminals who work on their behalf.”
“The costs of fraud and abuse of the state’s no-fault system ultimately are borne by New York’s honest policyholders,” Hartwig said. “New York’s no-fault claim costs are now the second highest in the country and are 111 percent higher than the U.S. average of $4,152.”

This would mean either that the cost of auto insurance premium will increase for New York and secondly as per the insurance companies they would have to take more preventive and loss control measures so that the claims can be curtailed and kept very low.

It would be best for you to shop online for cheap auto insurance quote. Please check out the quote here. You will be suprised at the amount you can save.

Tagged with: Auto Insurance Coverage • Auto Insurance Premiums • Auto Insurance Rates • Auto Insurers • Automobile Accident Cases • Car Insurance Claims • Cheap Auto Insurance • Cheap Auto Insurance Rates • Fault Insurance • Fault System • Insurance Association • Insurance Expenses • Insurance Information Institute • Medical Payments • New York Insurance • New York State Insurance • New York State Insurance Department • State Insurance Department • Walker New York • York State Insurance

Filed under: Car claim and car insurance quote • Cheap Car Insurance for teenagers • Cheap teen auto insurance • Teenagers Auto Insurance

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