No-Fault-Based Insurance Essay

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Australia currently operates under a fault-based insurance system for medical injuries, meaning that the person at fault in an incident must provide compensation to the injured party. Until a few decades ago, most countries preferred this type of insurance. However, some countries, such as New Zealand, introduced a no-fault insurance system, in which individuals are compensated for losses by their own insurance company, regardless of fault. Through the introduction of the no-fault system, injured individuals do not have to go through the costly process of taking the negligent party to court and proving fault, allowing those who can’t afford going to court to be provided compensation. However, the compensation is less than if they were using …show more content…

For example, third-party motor vehicle incidents and workers compensation are no-fault, but medical insurance is fault-based. Through having fault-based medical insurance, injured parties are forced through court cases which are likely to take years before they are settled, and which may not even result in an acceptable sum of money to cover long-term costs of care. However, this outcome is preferable to the alternative, in which a legally responsible individual is unable to be found and the injured party would receive no compensation. Introducing the no-fault insurance scheme for medical insurance in Australia would guarantee compensation for an injured party. Alongside this, there are many advantages to introducing a no-fault system, including the predictability of it, stable costs, and focusing more on the rehabilitation of the injured party rather than placing the blame. It removes the possibility of over or under compensating an individual, and through that it becomes fairer. There are, of course, a few disadvantages to introducing no-fault insurance, such as the lack of flexibility with different cases, the lowering of worry about injuring another person as the guilty party would no longer have to pay, and it doesn’t allow the injured party to have their day in court. However, these negative aspects of no-fault insurance don’t outweigh the positive aspects, and aren’t certain to have a large effect on the compensation received by injured

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