No-Fault Car Insurance is a system of law that allows drivers to receive compensation for their medical expenses and other losses without having to prove fault in an accident. It is designed to help lower the cost of car insurance by eliminating many of the costs associated with litigation after an accident.
No-Fault Claims Process
No-Fault Car Insurance is an insurance policy that pays for your medical bills and other expenses if you are involved in an auto accident. It is available in 12 states and Puerto Rico, and it differs by state.
While a no-fault car insurance policy limits your right to sue the other driver, it does not limit your ability to receive compensation for other damages you suffered as a result of an accident. In some cases, you may need to hire a lawyer to get the full amount of money you deserve for your injuries.
No-fault laws are based on the belief that insurers should not be burdened with paying out claims that are frivolous or not related to an auto accident. This helps prevent the courts from becoming overwhelmed by personal injury lawsuits, saving drivers and insurers money on legal costs.
No Need to Prove Fault
No-Fault Car Insurance is designed to provide medical coverage for anyone injured in a car accident, regardless of who caused the crash. It was enacted to speed up compensation without the need for long-drawn out litigation.
It is important to remember that while No-Fault does not require you to prove fault in the claim process, it does require you to show the defendant or property owner breached their duty of care through negligence or carelessness.
For example, if a store owner knew that the lobby of their business tower was wet and not properly cleaned and a customer slips and falls, they can be found negligent.
While the No-Fault Claims Process does not require you to prove fault, it is vital that you gather as much evidence from the scene of the crash as possible. That information can be very helpful in your case later on.
No Limits on Claims
Unlike other kinds of auto insurance, no-fault car insurance coverage pays out regardless of who’s at fault for the accident. This means your own insurance company will pay your medical bills and lost wages, up to your policy’s limits.
But that’s not the only difference between no-fault and other types of auto insurance. In a few states, drivers can also sue for economic losses after a crash, as long as their injuries exceed a monetary tort threshold set by state law.
In New York, for example, you can file a third-party liability claim or personal injury lawsuit against an at-fault driver for compensation for all categories of losses (including pain and suffering), if your injuries qualify under the state’s “serious injury” threshold. But if your injuries are less severe, you’re limited to a no-fault or PIP claim under your own policy. If you’re unsure whether your injuries qualify under this threshold, you should speak with an experienced car accident attorney.
No Limits on Damages
No-Fault Car Insurance policies in a few dozen states are set up to pay medical expenses and other out-of-pocket losses up to your policy’s limits, no matter who caused the accident. A handful of other states use a hybrid no-fault system that allows claimants to choose between a no-fault policy and a traditional tort liability policy.
No-fault states require drivers to purchase personal injury protection (PIP) coverage in addition to bodily injury liability insurance. PIP pays for things like health insurance deductibles, lost wages, essential services you can no longer perform due to an injury and funeral expenses.
No-fault claims are also typically paid much faster than traditional third-party liability claims. This is because the insurance industry spends less on litigation in no-fault states and passes this savings on to customers.