Over the past few years, increasing frustration with fraud, abuse and massive cost increases in several jurisdictions has forced legislators and regulators to take a serious look at reform of their state's no-fault laws.
Today, 12 states have no-fault systems: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah. Each state's laws differ with respect to litigation thresholds, personal injury protection (PIP) limits and other factors such as the threat of lawsuits for “bad-faith”—all of which influence the effectiveness of the laws.
No-fault auto insurance was developed 40 years ago by Robert Keeton and Jeffrey O'Connell, two law school professors who believed it would create a more efficient alternative to the tort system by reducing wasteful litigation costs and allowing policyholders to quickly collect lost wages and medical benefits after an auto accident without regard to fault.
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