Many states are still working under the no-fault auto insurance ruling and experts believe this is causing a crisis in the auto insurance industry. The laws were originally put into place to stop ambulance chasing lawyers from submitting small-claims cases, and it helped car accident victims receive funds quickly instead of waiting for the determination as to who was at fault.
Unfortunately, these laws are backfiring since many believe its contributing to fraud, rising medical costs, large benefit payouts, and excessive lawsuits. Auto insurance quotes in Florida are skyrocketing and many are blaming their no-fault laws according to “Why Does Everyone Hate No-Fault Car Insurance?” by Barbara Marquand on FoxBusiness.com. Some insurance companies have actually limited their business in states with no-fault insurance laws since it ends up being so much more expensive for the insurer. This ends up affecting competition and can drive up auto insurance rates.
Currently, 12 states and Puerto Rico have no-fault auto insurance laws including Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah. The laws allow policyholders to collect funds for car accidents from their own insurance company regardless of who was at fault. The laws also prevent people from suing for pain and suffering unless their injuries are a certain extreme. Florida is the nation’s staged-accident capital and this of course drives up Florida auto insurance quotes. Many industry experts believe no-fault auto insurance needs to be eliminated altogether or the crisis will continues and rates will keep going up.