30 Nov, 2011
in Finance
by admin
As a solution for pushing motorists to purchase insurance few states stop uninsured drivers claiming cash from insurance pools although they are victim of another driver. Some of these laws ban uninsured drivers from making liability claims against faulty drivers while they do not have valid liability cover themselves in such states.
Certainly it is not that tough to see the logic behind those laws when uninsured drivers are moving around freely all over America. Notably those restrains do not apply if the guilty party was drunk or flees the accident.
Then no fault states found a better answer in decreasing litigations and not rewarding drivers without coverage as they demand everyone to get their own personal injury policy. Therefore there seems to be a solution for ensuring that uninsured drivers can not be rewarded from insurance pools.
Neutrally examining it might not be that noble a plan after all. It might imply a blame authority rather than solution finding authority. In other words, Regulators might be skipping the real reasons behind vehicle insurance dodging but rather attempt to find the guilty party to accuse.
When an uninsured motorist puts in a claim and gets paid the effect would be hiked up premiums for all the automobile insurance customers. That is probably the basis of such legislations and it is an attempt to force most individuals buy insurance coverage.
Clearly the correlation between number of motorists with no insurance in a state and how costly it is to insure a car in that state is fairly high. When you check areas with high percentage of motorists with no insurance you would probably be looking at an expensive automobile insurance zone.
Nonetheless there is one strong case for “no pay no play” laws. Essentially insurance fund is received from policyholders. All the damages and losses faced and caused by policyholders are paid out of this pool. Normally when you begin driving you are a member of this pool since it is a legal condition to get insurance prior to starting driving. In that sense uninsured drivers have ignored to pay their contributions and they should be declined any access to money collected.
Even the best auto insurance companies would feel the hit on their funds from the claims. While some strongly support such laws a few of them just gets on with it.