No-Fault System vs. Fault System

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If you are involved in a car accident, you have the right to file a claim to receive compensation for medical expenses or wage loss. With the differences in laws related to car insurance laws in the United States though, filing a claim is hardly a cut-and-dried process. Auto insurance laws are divided into two main categories, namely no-fault system and fault system.

Under the no-fault system, it does not matter who is responsible for the accident. Any driver who is injured as a result of the accident can simply file a claim with his or her own insurance company. In turn, the insurance company will cover medical expenses and wage loss as long as the amounts are within their policy limits.

In the fault system, like North Carolina’s, the party who caused the accident is of utmost significance. For this reason, establishing fault in car accidents is necessary before an insurance company can approve a claim and award compensation. Here, compiling pieces of evidence like police reports and witness statements can definitely help.

The tricky part though in a state that uses the fault system is that if a party is proven to have a share of the blame in the accident, he or she may see his or her claim denied. Even if the claim is approved under the circumstances, the person will likely see his or her settlement be reduced. A lawyer can argue the insurance provider’s decision so the client can receive due compensation.

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