Where driving is the issue, then all US states require drivers to have the financial capability, whether through auto liability insurance, a bond, or any other state-approved means, to pay for any damages they may cause to another individual and/or his/her property in the event of an automobile accident.
Auto liability insurance, which is mandated in 48 states have different types. Two of these are the full tort car insurance and the no-fault or personal injury protection (PIP). In full tort car liability insurance package, the drivers involved in an accident can sue each other, first, for the purpose of determining whose fault the accident was and, second, to seek compensation from the liable party for all (physical and/or property) damages the innocent driver was made to, and will still, suffer. Full tort coverage also allows for compensation for pain and suffering.
No-fault insurance or PIP is a type of insurance coverage wherein the policy holder is paid by his/her own insurance provider in the event of an accident regardless of whose fault the accident was. PIP, however, limits the right of the victim to sue the person at fault – a condition that many consider advantageous to both victim and driver at fault for such reasons as: both will be paid by their insurance providers; there is no more need to file a lawsuit for the victim to prove the fault of the other driver (the basis of tort coverage) and, upon determining fault, for the victim to claim damages; and, the cost of the premiums, compared to tort coverage, is lower since filing a lawsuit is no longer necessary.
Besides covering medical cost for bodily injuries, PIP may also cover other losses or damages (legally called economic damages) like lost wages due to inability to report to work (this is not an automatic guarantee, however, since some states have not approved coverage of lost wages).
The no-fault car insurance coverage is mandated in these nine states: Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New York, North Dakota, and Utah. Three other states: Kentucky, New Jersey and Pennsylvania, allow drivers to choose which insurance coverage they will want to carry either the full tort or the no-fault coverage.
According to the website of Schuler, Halvorson, Weisser, Zoeller & Overbeck, P.A., it is quite common for many insurance providers to deny claims, delay payments on claims, or underpay them. As a result, injured victims are further made to suffer by these insurance firms which put them in financial difficulties.
Injured victims, though, are not the only ones affected by the disloyalty of insurance firms. Even health care providers (who have provided the needed medical attention) end up not getting compensated for the services that they have already rendered.
Insurance providers, a lot of these, have been known to employ tactics which will keep them from making payouts in order to keep their profits. As a result, the ones in the losing end are the injured victims, their families, and all those who have rendered them services, especially health care providers. Auto insurance liability coverage policies are legal documents; there are times when it would take legal counsels to fight for the right of policy holders and to remind insurance firms of their obligations in compensating their clients who are eligible to make claims.