OnlineAutoInsurance.com Explains Differences between Liability and No-Fault Coverage

    RANCHO CUCAMONGA, CA, May 11, 2011 /24-7PressRelease/ -- Practically every state in the nation requires that residents who own autos purchase car insurance coverage, but the necessary types and amounts differ widely. In a new FAQ from OnlineAutoInsurance.com, the writers explain the key aspects of the two main coverage systems in the U.S.: liability and no-fault.

All states with compulsory coverage laws require drivers to purchase some property damage liability insurance, which goes to pay for property repairs caused by the policyholder.

Where states differ, though, is how drivers get protected for bodily injury damages and medical bills.

Florida auto insurance policies, for example, must include a type of no-fault coverage called personal injury protection (PIP). Florida PIP pays for a portion of the policyholder's medically necessary expenses, lost wages due to serious injuries after an accident and death benefits after a crash.

Source: http://www.myfloridacfo.com/consumers/guides/auto/docs/autoguide2008.pdf

Policies in other states, though, may not include any form of no-fault insurance to cover medical expenses. Instead, they require drivers to purchase bodily injury liability protection. This type of protection also pays for medical expenses, but rather than pay for the expenses incurred by the policyholder, it pays for the expenses of other drivers injured in a crash caused by the policyholder.

In states like New York and Minnesota, drivers are required to purchase both liability and no-fault coverage.

One pitfall of no-fault systems is that they are prone to abuse. Legislative campaigns have been launched this year in New York and Florida due to change some of the fundamental aspects of those states' systems in order to root out fraud.

To learn more about this and other car policy issues, readers can go to http://www.onlineautoinsurance.com/florida/ where visitors will have access to informative resource pages and a quote-comparison generator that can be used to evaluate an individual's options in any state.

To access the full FAQ, visitors to the site can follow the "Questions" link located at the top of any page on the site.

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