Question

How does no-fault insurance impact drivers? Please answer in a paragraph (8 to 12 sentences) with details.

Answer 1

Proponents of no-fault auto insurance claim the system delivers speedier and more equitable compensation at lower cost than traditional tort insurance.That no-fault insurance could alter driving behavior enough to cause fatal accident rates to be as much as 10 percent higher than they might otherwise be is a striking conclusion, and one
that has had a significant effect on recent debates over no-fault.A commonly made argumentagainst no-fault is that individuals should be held accountable for their negligent actions. A tort system provides redress for those injured and serves to deter negligent actions overall.Typically, states require drivers to carry some minimum level of liability coverage specified in both per-person and per-accident terms (for example, $10,000 per person/$20,000 per
accident). Thus, the insurance company of the at-fault driver will compensate a third party for the
losses sustained in an accident up to the policy limits.1 The at-fault driver’s own insurance covers his or her own injuries (for example, Medpay) and property damage (for example, collision),assuming he or she chooses to carry such insurance.Potential damages to the at-fault driver include property damage, bodily injury, wage
loss, and non-economic damages. In both tort and no-fault states, personal collision insurance
compensates at-fault drivers for their own property damages, and under neither system are the
at-fault driver’s own non-economic damages eligible for compensation
Consequently, no-fault does not differentially affect incentives through its treatment of the atfault
driver’s property and non-economic damages.