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What is no-fault car insurance and how does it work?

  • Cars Explained
  • Xavier Sabastian
  • 4 minutes

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No-fault car insurance is something everyone should be aware of. But it’s not applicable to every state in the US. This blog will help with all the queries you have regarding no-fault car insurance in the US.

Legislators launched a new form of auto insurance in the 1970s:¬†no-fault insurance. When the police couldn’t find out who was at fault for an accident, it was supposed to help accident victims escape drawn-out legal trials or other financial issues. In several states, no-fault insurance has been abolished. Colorado was the most recent in 2003.

Affordable no-fault car insurance

So, what exactly does “no-fault” imply? Assume you’ve been in a car accident. Even if the accident was not your fault, you must file a claim with the auto insurance provider in a no-fault state. To help pay for medical bills, you must buy Personal Injury Protection (PIP*) coverage.¬†¬†

Kentucky, New Jersey, and Pennsylvania are the three states that serve as no-fault car insurance states. If you live in a choice state, you can choose between no-fault car insurance and standard liability coverage, typically used for at-fault insurance. 

What does no-fault car insurance cover? 

¬†No-fault insurance does not cover property damage. As a result, if the car takes part in an accident caused by another driver, the other driver’s Liability Property Damage policy will assist with the repairs.¬†PIP (required* in no-fault states, but available in some at-fault states) is a type of insurance that helps pay for medical bills and accidents caused by accidents. It excludes the following:¬†

  • Harm to the vehicle¬†
  • Theft of a vehicle¬†
  • Weather-related harm¬†
  • Harm to property¬†

Collision and Comprehensive should be a part of your policy if you want to cover your vehicle in the categories mentioned above.  

Is no-fault car insurance mandatory?

Yes, it is mandatory. Everyone who drives in a state with no-fault laws needs to purchase personal injury protection (PIP), which is present in their car insurance policies.

no-fault car insurance

Frequently Asked Questions (FAQs) 

What is no-fault insurance? 

No-fault insurance ensures that if you’re hurt in a car accident, your insurance covers some or all of your medical costs and missed wages, regardless of who is at fault.¬†

What does a no-fault state mean? 

In a no-fault state, drivers should carry insurance to cover injuries incurred due to a car accident. This form of auto insurance protects you from bodily harm and property damage. It makes no difference who is at fault in this case. This helps in the reimbursement of medical expenses incurred due to the injuries sustained in an accident. 

What are no-fault insurance states? 

There are no-fault car insurance laws in twelve states. Verbal thresholds exist in Florida, Michigan, New Jersey, New York, and Pennsylvania. Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota, and Utah are the other seven states that use a monetary threshold. An “option” no-fault statute exists in three states.¬†

What are the requirements of the no-fault law?

If you take part in an accident, no-fault auto insurance laws require you to file a claim. With your own insurance company regardless of who was at fault. Vehicle drivers may sue for severe injuries and pain and suffering under no-fault laws to the damages that meet certain criteria.

No-fault car insurance

Do you have a no-fault accident on your record? 

It depends on your state’s rules since they differ from one another.¬†¬†

You will not find anything on the record until the police are called to the scene of an accident. To learn more, look up the laws in your state; you can also search your Motor Vehicle Report (MVR) to see if you’ve been in any recent incidents.¬†

What happens if a driver in a no-fault state is uninsured? 

You can also file a claim with your insurance provider if you are in a no-fault state and are struck by an uninsured or underinsured driver. For added insurance, you can buy Uninsured and Underinsured Motorist coverage. Except for New Hampshire, driving without insurance is illegal in all jurisdictions. It is never worth the risk to drive without insurance. 

Is Florida no-fault insurance? 

Florida is also a “no-fault” auto insurance territory, which means your legal choices get restrictions if you were at the scene of a car accident. Read on to learn more about how Florida’s no-fault auto insurance scheme operates, as well as the state’s minimum car insurance policy standards.¬†

Does no-fault insurance apply in NY? 

New York is a “no-fault” insurance jurisdiction, which ensures that regardless of who is at fault, insureds are usually reimbursed by their insurance provider for losses. Medical expenses and other damages incurred as a result of the accident can be reimbursed to the insureds.¬†

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