Car insurance is an institutional framework for the defense, settlement, and litigation of tort (an injury to person or property) claims in the case of an automobile accident.

The system of automobile accident insurance that meets a State adopts the following question: Who pays when there is a car accident? Three car insurance systems accidents are possible: no blame, guilt, and a combination of fault and blame.

In a pure no-fault system, when an automobile accident insurance for each driver, company to compensate its insured for personal economic damage – For example, medical expenses, lost wages, funeral expenses and death benefits – to the limit of each policy, regardless of driver who caused the car accident or was at fault.

This personal coverage of the economic damage that is called personal injury protection or PIP. In this system, then it is essential that Each driver has a car insurance. The compensation for the insurance company for each driver, the payment of economic damages from its own insured each driver is prohibited from suing the other driver for noneconomic damages such as pain and suffering or loss of companionship.

Theoretically, rates or insurance premiums should be lower in an error of the states since insurance companies are saving money by not having to initiate lawsuits or defend its insured in court. However, no state has adopted a pure no fault system of automobile accidents.

Instead, states have adopted a system failure or a combination of fault and blame for car accidents. When an accident occurs in a state of failure, the driver responsible of the accident – the driver is at fault – or your insurance company pays for damages.

However, not always clear who was at fault in a car accident. And in many accidents both drivers are to blame to some extent. Since each driver pays according to their own proportion of fault, drivers can sue each other to determine these proportions. In a system failure, each driver reserves the right to sue the other driver for damages, economic and noneconomic, following a car accident.

If a State has adopted a combination system or any system once blame for car accidents, drivers are compensated by their insurance companies for economic damages to the limits of the policy and also have the right to sue the other driver in certain situations. Normally, a driver may sue another driver for injuries suffered in a car accident if damages exceed a certain dollar amount that each state has mandated. Some states also allow trials in auto accidents where injuries a driver meet a specified standard of gravity, for example, "serious personal injury.

A State may opt to change their responsibility system of automobile accident insurance at any time through the state legislature. Check with insurance providers or the state board of insurance in your state to determine what type of insurance system your state has adopted for motor accidents.

About the Author:

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Article Source: ArticlesBase.com – Automobile Accidents and Insurance: No Fault and At Fault Systems

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