The term no-fault insurance is defined as a type of insurance contract in which the insured party is indemnified by their own insurance company for the losses that occurred, regardless of the source of the cause of loss. It means if you have suffered any losses, your insurance company will be liable to pay for the losses irrespective of whether the loss has been caused by the fault of you or any other third party.

No-fault insurance is generally available in automobile insurance laws in the United States of America and some other developed countries. In these cases, the passengers affected in a car accident are reimbursed by their own insurance company without seeking proof of the source of the accident or inquiry about the party who was at fault.

The no-fault policy laws are enacted to prevent expensive litigation. The courts of law are overburdened with cases, and it takes quite a long period of time to finally decide a case.

Similarly, the number of automobile accidents is very high in cosmopolitan cities such as New York City; therefore, the policy of no-fault insurance policy is adopted to ease the burden of the court.

The policy prevents individuals from approaching the courts of law for the settlement of disputes, and the victims of car accidents can directly reimburse the payment from their own insurance companies. Therefore, it ensures quick payment for injuries and loss of property.

How does no-fault insurance work in New York?

New York is included in the list of states which follow no-fault insurance policies. It means the inhabitants of New York can reimburse the compensation for the damages caused to them in automobile accidents regardless of who was responsible for the accident.

However, the laws of New York also mandate mandatory insurance possible. According to the New York Department of Motor Vehicle Website, the motor vehicles are mandated to have liability insurance with a certain minimum coverage amount:

$25,000/$50,000 for bodily injury per person
$50,000/$100,000 for death
$10,000 for property damage per accident

If you are living in the state of New York, you are mandated to comply with the state law and ensure insurance coverage as provided in law. If you fail to comply with the mandatory requirement of law, you will not be entitled to claim any compensation in case of a car accident. Therefore, it is essential to follow the law and be ready for any unintended consequences.

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