No Fault Vehicle Accident Insurance

Reader’s Question:

Hi I just moved to Utah. Another vehicle hit mine while it was backing at a small parking lot. The other party has conceded that it wasn’t my fault. Why does my insurance and I have to pay for the damage to my car?

Kathy

Provo, UT

Kathy, that’s because Utah is considered a no-fault state. It grants no-fault first party benefits to drivers in any accident with some limits. It also restricts the right to sue. Simply, it means your own vehicle accident insurance will cover your losses without taking fault into consideration. If the injuries and damage to property you have incurred are severe, you may still opt to sue and demand that the other party be financially responsible. The whole point of a no-fault system, though, is to discourage taking auto insurance issues to court. The advantage of this restriction to sue is that it expedites the process of making claims.

Under this state regulation, drivers typically sue if the injuries or vehicle damage meet certain conditions or what is commonly called a threshold. The state defines which accidents may be considered “severe” and the standards vary from state to state. For instance, some states consider the length of time one has been disabled or unable to work. In some states, it doesn’t really matter. Utah, as well as Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota use a monetary threshold, in which severity is defined by medical bills you have to pay for.