Hawaii Auto Insurance: Advantages to a No Fault System?

Every state preserves differing auto insurance laws. Most states require drivers to have two forms of liability insurance: bodily injury and property damage. Hawaii auto insurance regulations are no different, requiring minimum liability limits of $20,000 per injured person and a total of $40,000 per accident. The property damage minimum is $10,000. This is often referred to as 20/40/10 coverage. Although their insurance laws are similar to the rest of the nation, their method of handling accidents is different. Hawaii operates under a “no fault system” rather than a “tort system.” Most states have a tort system, which means someone must be found “At Fault” for the accident and that person and their insurance company are required to pay for all damages. In Hawaii, your insurance company will make payments to cover your injuries/damage, regardless of fault. Each method has its advantages and disadvantages, but here are a few of the strengths of the no fault system.

The no fault system significantly reduces the number of legal proceedings which occur. The goal is to lower the costs of insurance premiums by avoiding the expensive litigation over the causes of accidents and to quickly pay out for accidents. In this case the victim's insurance only pays out a claim and the driver-at-fault's insurance company pays both the claim and charges a high insurance premium because they are now considered a higher risk. By avoiding lengthy processes to determine who is at-fault, quicker payments can be made. Filing claims can be an arduous and frustrating process and this eliminates the wait.

If you are, by chance, at fault for the accident, no-fault insurance relieves you of responsibility for the other driver's injuries/damages. You may think this is unfair if you are the victim, but if you consider that it relieves you of any hassle regarding court or legal fees, it may be an equal exchange. In the long run you could potentially save thousands avoiding all the extra fees that follow a claim.

The no-fault system certainly has various limitations as well. Many feel that the system does not punish negligent drivers adequately. Furthermore, it runs the risk of over compensation in some cases. However it does offer the advantages of quicker payments for both parties. The no fault system only precludes that consumers should be selective with Hawaii auto insurance and not try to skim on cost. Your plan covers all of your costs and you should make sure to invest in the best possible plan you can afford.