Understanding No-fault Auto Insurance

Except for one state, Michigan, no-fault auto insurance does not apply to property damage. Damage drivers cause with their cars to the property of others can be insured only under property damage liability insurance; damage to their own cars comes under collision and comprehensive coverage.

No Fault Auto Insurance Explained

Although income is certainly a factor for some drivers in not purchasing insurance, level of income is not in itself predictive of whether a driver will or will not buy insurance. In fact, the AIRAC research shows that uninsured drivers are not a distinct, easily identifiable class of motorists. For example, on the issue of income, the A-IRAC study showed in 1988 that, in households with incomes under $7,500, 30 percent had uninsured vehicles; but in households with incomes over $30,000, 4 percent had uninsured vehicles. Enter your zip code and compare quotes from various providers – ask for auto insurance discounts.

Indeed, according to the AIRAC data, the most striking characteristic of uninsured motorists is that they closely resemble insured motorists, for the most part. For example, male drivers account for about two- thirds of all auto accidents, among the insured and the uninsured population. The conclusion is inescapable that cost is not the only- factor that causes people to refuse to buy insurance, since significant numbers of uninsured motorists can, presumably, afford to buy insurance and since the insured and uninsured groups are alike in other ways.

Although there is little research on why some drivers do not purchase insurance, there are indications that at least some of them may view third-party liability insurance as an unnecessary product, because it provides benefits not to them but to an unknown third party. Some may also feel that they simply do not need insurance because they will never be at fault in an accident.

The actual number of uninsured drivers is not known and estimates vary considerably. The number appears to be growing, possibly because as insurance costs go up, more car owners gamble on not having an accident rather than pay the price of insurance.


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