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.
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.
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.
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 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.
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.
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:
The police will ask drivers questions at the scene and compile a police report.
Each driver will contact their insurance company and explain the incident in detail, and the insurer will request and review the police reports.
- 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.
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:
You’ll collect the other driver’s information, including license and registration.
The police may file a report that describes the scene of the collision and includes drivers’ information.
You and other drivers will contact your respective insurance companies and explain what happened.
Your insurance company and those of other drivers may disburse up to the total of your PIP coverage to pay for medical expenses.
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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