No-fault insurance, explained


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A no-fault state is one in which drivers must file claims with their own insurance companies to cover their own damages or injuries, no matter which party actually caused the collision. That means if someone runs a stop sign and crashes into your passenger’s side door, your insurance company — not the other driver’s — will cover the damage to your vehicle.

States have different car insurance requirements and rules. While certain states operate using a tort or at-fault model, others operate under a no-fault system. Both systems have specific rules about which driver’s insurance coverage kicks in after a collision and whether an affected party can sue the other driver for damages.

Here’s how the no-fault model works, how it compares with the at-fault system, and what to know about claims and coverage requirements.

No-fault insurance states

The following 12 states mandate no-fault insurance. Required coverage levels vary by state.

No-fault vs. at-fault states

The no-fault system is intended to help reduce lawsuits and streamline the process of determining who’s at fault in a collision. In a no-fault state, drivers are required to carry personal injury protection coverage. This insurance covers medical expenses after a crash, regardless of who’s responsible. So if both parties are injured after a collision, each driver’s own PIP coverage will pay for their health care costs, regardless of fault.

In an at-fault state, also called a tort state, the at-fault driver’s liability coverage compensates for costs related to the other driver’s medical costs and damage to their vehicle. So if you’re not responsible for a crash, the other driver’s insurance should cover your medical bills and other necessary costs.


Florida drivers now pay more for car insurance than drivers in any other state, including California, New York and New Jersey.

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It’s important to note that insurance premiums in no-fault states can be higher than those in at-fault states, as drivers may be required to purchase more coverage.

At-fault states

Apart from the difference in responsibilities for medical costs in at-fault versus no-fault states, there are legal implications. If you live in an at-fault state and are hurt in a covered incident, you can generally sue the other driver. Unlike in no-fault states, your medical bills or injuries won’t need to meet a certain monetary or verbal threshold before you’re eligible to file suit.

No-fault states

Minimum insurance in no-fault may include bodily injury and property damage liability, personal injury protection coverage, and uninsured or underinsured motorist coverage, but it varies state by state.

States with optional PIP coverage

Certain states offer optional PIP coverage without being considered true no-fault states. In these states, drivers not at fault can sue at-fault drivers for damages without needing to meet a specific monetary or verbal threshold. States (and one district) with optional PIP coverage include:

‘Choice no-fault’ states

Three U.S. states operate as “choice no-fault” states that use a full or limited tort system, which we’ll explain in the next section. Specifics regarding coverage requirements and your ability to sue an at-fault driver become more complicated in these states:

Difference between no-fault and tort insurance

At-fault states operate with a tort insurance system, which requires the at-fault driver’s insurance company to compensate the other driver for vehicle damage or injuries. In most cases, states that use a tort system don’t restrict a driver’s right to sue for damages after a collision.

Tort insurance

Tort insurance exists in two common types: limited and full. With limited tort insurance, an option in choice no-fault states, your ability to sue an at-fault driver is limited after a collision. For instance, you can sue to get reimbursed for medical costs, but you can’t sue for pain and suffering. The rules vary by state, so it’s important to understand your state’s requirements when considering litigation.

Important Information

No lawsuit restrictions exist under full tort insurance. You can bring suit against the responsible party and potentially get compensation for medical costs and pain and suffering.

Fault and damages

Drivers can still be responsible for a crash in a no-fault system. Fault is determined in no-fault states, even though insurance works differently than it does in at-fault states.

Determining fault

The process of determining who’s at fault in a collision doesn’t change, whether you live in an at-fault or no-fault state. In general, the process involves the following steps:

  1. The police will ask drivers questions at the scene and compile a police report.

  2. Each driver will contact their insurance company and explain the incident in detail, and the insurer will request and review the police reports.

  3. The drivers’ insurance companies will communicate and determine fault based on the police reports and each driver’s statements.

Who pays for damages?

While your personal injury protection insurance will cover your own medical costs in a no-fault state, the at-fault driver may still be liable for other costs, such as damage to your vehicle. In this case, their property damage liability insurance would help pay for your car repairs.

No-fault claims

In a no-fault state, each driver is required to submit a claim with their insurance company, even if it’s clear one driver caused the crash. The claims process can vary depending on your insurance company, but in general, the following steps take place:

  1. You’ll collect the other driver’s information, including license and registration.

  2. The police may file a report that describes the scene of the collision and includes drivers’ information.

  3. You and other drivers will contact your respective insurance companies and explain what happened.

  4. Your insurance company and those of other drivers may disburse up to the total of your PIP coverage to pay for medical expenses.

  5. All insurance companies will obtain copies of the police report, review your descriptions, and determine who’s at fault. If the other driver is deemed at fault, their property damage liability coverage should compensate you for damage to your vehicle.

Personal injury claims

Your PIP coverage should kick in if you live in a no-fault state and you’re hurt in a collision. For instance, if another driver hits your car and you dislocate your shoulder in the collision, your PIP coverage may pay for your medical bills, but it won’t cover the other driver’s medical expenses. In certain cases, it may also cover things such as lost wages or funeral costs for affected parties.

Property damage claims

Property damage liability can cover damage to your vehicle if another driver is found at fault in a collision. For instance, if another driver runs a red light and hits your passenger door, that damage may be covered by their property damage liability insurance.

Shopping for affordable insurance in a no-fault state

Whether you live in a no-fault or at-fault state, comparing policies from different insurers is the best way to find affordable coverage. Consider using a reputable car insurance comparison tool to simplify the process and save time.

No-fault states FAQs

When can you sue with no-fault insurance?

While no-fault insurance was designed in part to reduce the number of civil lawsuits after collisions, you can still sue with no-fault insurance in certain cases. For instance, you may be able to sue if your medical bills exceed a certain monetary or verbal threshold. Review the requirements in your state, and speak with your insurance company if you’re considering litigation.

If you have health insurance, do you need PIP insurance? 

You may still need personal injury protection, sometimes called no-fault coverage, if you have health insurance. Certain states mandate that you carry a specific amount of PIP coverage to meet the insurance requirements.

What makes a state qualify as a no-fault state?

In no-fault states, drivers must buy a set amount of personal injury protection insurance. If you’re involved in a collision in a no-fault state, you may not be able to sue the at-fault driver. You may be eligible to file suit against an at-fault driver if your medical bills exceed a certain threshold.

What happens if you’re out of state and have an collision in a no-fault state?

If you live in an at-fault (or tort) state and have your state’s required insurance coverage, you may be able to claim no-fault benefits if you’re involved in a collision in a no-fault state. Contact your insurance company to discuss your options, as specifics vary by auto insurance provider.

This article originally appeared on Insurify and was syndicated by MediaFeed

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11 easy ways to pay less for car insurance

There are many factors that influence your car insurance premium. Many of the factors that determine whether you have affordable car insurance or not, including your age, sex and location, aren’t in your control. But there are some that are. Here are some ways to lower your car insurance bill.


If you haven’t shopped around for auto insurance lately, and you’re hoping for more affordable car insurance, you should probably make this task a priority. Most auto insurance companies will quietly raise your rates over time, which is why shopping around for new car insurance quotes can yield great savings and be a great way to find the cheapest car insurance. It’s also a good chance to check in on your coverage amounts. Many people have too much or too little insurance. This guide can shed some light on how much car insurance you really need.

Many car insurance companies also sell other insurance products — like homeowners and renters insurance — and many of those companies offer discounts for having two or more policies with them. If you have policies with different insurance companies, consider moving them all to one carrier to take advantage of bundling savings, also called “multiple policy savings.” The cheapest car insurance company may be the one you already have another policy with.

Teenagers aren’t the only ones who can earn insurance discounts by taking driver’s education courses. Many states offer lower rates to those who take defensive driving courses. In New York, for example, if you complete a defensive driving course after you start driving an insured vehicle, you’re eligible for a 10% base rate reduction on your liability and collision insurance for up to three years. Not all states, however, offer these courses, and discounts vary state to state. Check with your insurance company or state department of motor vehicles to see if these courses are available to you.

If you’re a student or you have a child who is a student and you are paying for their car insurance, you could save by taking advantage of one of several student discounts. Ask your insurance company about a good student discount. Additionally, if your child is a full-time college student attending a school 100 miles away or more, you could get a distant college student discount so they’re covered when they’re home, but you’re not paying for them when they’re not.

Some insurance companies offer discounted rates if you belong to a particular organization or if you work for a certain company. If you have a membership in an organization or work for a large company, ask about discounts.

Not everyone can afford to pay several months of insurance bills at the same time. But if you can swing one payment for the entire premium for a six-month period, you may be able to save money with a pay-in-full discount. The savings vary depending on the insurance company and where you live. Ask your insurance company if they offer a discount if you pre-pay your premiums, and make note for when you renew your policy.

While you can’t erase any past tickets or collisions on your record, driving safely today can help lead to lower insurance costs. The longer you avoid a wreck or a speeding ticket, the lower the rates can go.

Although most drivers with good driving records are already receiving good driver discounts, if you spent significant time abroad in the past several years or you’re a new immigrant, you could be paying a needlessly high rate. If you’ve just moved to the U.S., you may appear as a new driver in this country, even though you’ve been driving for years in your home country. Many insurance companies will quote you higher new driver rates based solely on your short driving record in the United States. But, you can get around this by providing your insurance carrier with a copy of your good driving record from your country. Ask your insurance company what kind of proof they need to give you a good-driving discount.

Insurers often look to your credit score to determine how risky you are as a driver. You can take steps to improve your scores including paying down your debts, maintaining a good payment history and keeping the number of inquiries on your credit to a minimum. Read more about how to improve your credit score.

Keeping a low deductible on your auto insurance typically requires you to pay a higher monthly rate. On the flip side, you can save money on auto insurance if you boost your deductible. But it only makes sense to do that if you can actually afford to pay the deductible in case of an accident.

Cars with high safety ratings generally have fewer accidents, and cars with fewer accidents are cheaper to insure. If you’re a good driver with a safe car — such as a Nissan Maxima, Volkswagen Passat or Toyota Avalon — you could be paying some of the lowest rates possible. So if you’re shopping for a new car and hoping to keep your car insurance affordable, it makes sense to choose the right car.

This article originally appeared on Policygenius and was syndicated by

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