Personal Injury Law Firm
Different states have adopted different approaches to liability for car accidents. The traditional approach is to hold drivers accountable when they cause an accident. A driver is said to be “at fault” when the driver’s careless driving injures another person.
Some states do not base payment of compensation on fault. Although the details vary, “no-fault” states generally require injury victims to file claims with their own insurance company, regardless of fault.
About a dozen states, including Florida, have no-fault insurance laws. Like most other states, Georgia discovered that the traditional system reduces insurance costs while providing injury victims with greater assurance of fair compensation.
No-Fault Insurance Systems Compared to Georgia
In Georgia, drivers are required to purchase bodily injury insurance. That insurance pays claims made against drivers by persons who were injured because of the driver’s careless driving.
In a no-fault state, drivers must purchase Personal Injury Protection (PIP) insurance. That insurance pays benefits to injured drivers who purchase the protection, regardless of which driver’s negligence caused the injury.
In Georgia, an injury victim is entitled to be “made whole” by a driver whose negligence caused the injuries. Victims are made whole when they receive compensation that covers all their medical bills (including the cost of future medical care), their wage loss (including the loss of future earning capacity), and their pain, suffering, and emotional distress.
In a no-fault state, the compensation an injury victim will receive is determined by the PIP policy. Compensation is typically limited to medical expenses and lost wages.
Georgia injury victims can sue the driver who caused their injuries. States with no-fault laws typically restrict the right to sue a negligent driver. In some states, lawsuits for pain and suffering are authorized if medical bills exceed a certain threshold or if the victim has suffered certain types of injuries (such as significant disfigurement).
Georgia’s Experience as a No-Fault Accident State
Georgia enacted a no-fault law that took effect in 1975 but repealed the law in 1991. The insurance industry lobbied for no-fault laws in the 1970s. Industry lobbyists promised that the cost savings resulting from restrictions on lawsuits would result in lower insurance premiums.
By the mid-1980s, it became clear that the insurance company lobbyists were wrong. Insurance premiums in no-fault states were more expensive than insurance premiums in fault-based states. A study by the RAND Corporation showed that by 2004, premiums in no-fault states were 50% higher than premiums in traditional states.
As soon as Georgia repealed its no-fault insurance scheme, premiums dropped. Two years before the repeal, Georgia was the 16th most expensive state in which to buy car insurance. Four years after the repeal, Georgia was the 37th most expensive state.
Benefits of Georgia’s Rejection of No-Fault Insurance
In addition to reducing insurance costs, keeping the traditional system assures those accident victims will recover compensation for pain and suffering. Even when medical bills are relatively small, significant pain can be lasting and disabling.
A system that only pays medical bills shortchanges accident victims. In most Georgia insurance claims, compensation for pain and suffering is the largest component of the settlement.
Fault systems evolved because the law recognized that people who are responsible for accidents should be responsible for paying compensation to victims of their negligence. No-fault systems attack the basic American value of holding people responsible for their conduct. In addition, studies suggest that drivers in no-fault systems are less careful because they do not need to worry about being sued if they are at fault for an accident.
A personal injury law firm in Atlanta, GA understands that the state’s fault-based system of compensation serves the needs of their clients. They work diligently to assure that victims who are injured by another driver’s negligence receive the full compensation they deserve.
Thanks to Butler Law Firm for their insight into personal injury cases and no-fault accidents.