Is The No-Fault Auto Insurance System Truly Fair?

Post Date March 19, 2012 –  So-called collateral benefits, the amounts collected through hospitalization insurance, sick leave pay, or similar lower cost benefits, would be normally deducted from the proceeds of the auto insurance policy claim.  As you may imagine, no-fault auto insurance coverage  is quite basic.  An injured homemaker or her child with no paid employment could only collect out-of-pocket medical cost subject to a policy deductible. Auto insurance underwriters of a no-fault car insurance policy plans foresee an insurance rate reduction of perhaps 25%  after a states complete adoption of the insurance program.  With no real car insurance underwriting experience to use as a guideline, the true cost of a car insurance claim is pure speculation. A reduction of 3% in administration costs is predictive;  but critics insist that administration of accident claims are truly more expensive and are likely to increase .  Insurance Associations are studying loss experience over a period of months and years to determine the true claims costs if a Basic No-Fault Insurance Protection Plan was mandated in a specific state.

With the identical compensation offered, lowered car insurance rates and little to no reduction in insurance claim costs, it becomes clear a no-fault insurance plans propose to split the same coverage-pie  into smaller portions. This would automatically remove 75% of all  At fault Accident cases from Tort System. In reality the percentage would be much higher since it is doubtful that many under-$1000.00 cases would be pursued in the states courts.  Of the money paid to settle bodily injury claims, under 85% goes toward the claims in the $100.-$10,000.00 bracket. Of course,the gate keepers of our legal system, Attorneys, would prefer people be completely responsible for their own mishaps. An auto insurance policy based on Full & Limited Tort would be the choice of most officers of the court.


Michael E. Dortch
President &  Managing Agent
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602