Should Tort Liability Be Limited with No-fault Laws?

No fault Compared to Tort Liability; Under fort liability systems for auto accidents, drivers who cause accidents can be sued for damages by injured parties under a negligence standard. For the reasons, discussed in the previous section, most drivers are required to pay at least part of the costs they impose on others. Under a pure no-fault approach to compensating auto accident victims, tort liability for auto accidents would be eliminated. Instead drivers would bear their own losses. For the same types of reasons given for compulsory liability insurance under a tort system, a no-fault system usually requires drivers to purchase first party personal injury protection insurance that will pay their own losses. Without some medical costs and loss of income insurance, some drivers could shift the cost of accidents to others in society.

Thus first party health coverage for losses from auto accidents would be required under a pure no fault approach, but liability insurance would not be needed because drivers could neither sue nor be sued for damages.

Kentucky enacted what is approximately known as a choice no-fault law during this period, which allows auto owners to choose whether to buy PIP coverage and limit their tort liability. In addition, several states enacted so called add on laws that mandated purchase of PIP coverage without limiting tort liability, and several others made insurers offer optional PIP coverage without making people buy it again without restricting fort liability. Three states (Connecticut, Georgia and Nevada) subsequently repealed their compulsory no fault laws, and two states (New Jersey and Pennsylvania) converted to choice no-fault, largely in response to rapid claim cost growth under their compulsory no-fault laws.

PIP Benefits and Limitations on Tort Liability with compulsory No-fault :

The magnitude of required PIP benefits for medical expenses and loss of income varies widely across states with compulsory no-fault laws. For example, the minimum amount of total benefits for medical expenses and loss of income is less than $10000 in Massachusetts, approximately $50000 in New York, over $100000 in Colorado, and unlimited in Michigan. Like first-party medical payments coverage in states without no-fault laws, drivers and occupants of the vehicle are paid these benefits for injuries without regard to fault and the policyholder must pay a premium that reflects the cost of providing these benefits. PIP benefits generally are primary and group/individual medical expenses.

Limitations on Tort Liability; Compulsory no-fault laws limit tort liability in two ways. First, an insured party who receives PIP benefits generally cannot sue another driver for losses covered by PIP coverage. Second, and very important an injured party cannot sue for pain and suffering unless the magnitude of the injury satisfies a threshold specified in the no-fault law. Some states specify a dollar threshold that requires economic losses to exceed a specified and dollar amount.

We emphasize that no real world no-fault law eliminates tort liability.There is no pure no fault and most laws still allow large numbers of lawsuits. As a result, persons with assets to protect or who wish to comply with state compulsory liability/financial responsibility laws still need to buy auto liability insurance, and it often won’t be cheap.

From the above discussion we can say that, Yes, short tort liability be limited with no fault laws.

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