The definition of a no-fault state varies by state, as this is the term that defines eligibility for compensation from your insurance company if and when drivers get into a car accident. No-fault insurance, also called personal injury protection coverage, generally pays for the costs related to a car accident, regardless of who is considered the at-fault driver. No-fault states may require PIP coverage to help with the costs of the accident, as a standard car insurance policy may not always cover your expenses.
Living in a No-Fault State
There are 12 states across that country that utilize a no-fault insurance system. These states place restrictions on a driver’s right to sue the other driver’s insurance company for help with medical bills or other expenses resulting from the accident.
Rather than using a personal injury lawyer to pursue financial compensation, these states require personal injury protection (PIP) coverage. There is an alternative to the no-fault system, and these are the states that use tort liability to determine which auto insurance policy must pay for damages in an auto accident. These states rely on investigations and police reports to determine who’s responsible for the accident. In such cases, the at-fault car insurance provider generally covers claims.
Insurance Options When Living in No-Fault States
Every state has its own car insurance laws. In no-fault states, these laws often include a requirement for no-fault auto insurance, or PIP insurance. A no-fault state may also regulate how much no-fault insurance must be carried, as well as what the coverage includes.
Drivers in no-fault states must usually carry a PIP policy, which typically covers medical bills, lost wages, death benefits, and economic services for serious injury or disability. There are often caps on how much personal injury protection will pay for medical expenses, as well as stipulations on what kind of injury claim can be filed.
For example, Florida law stipulates a $10,000 PIP coverage limit. But if the bodily injury from a car crash isn’t considered an emergency, the payout is capped at $2,500. This applies regardless of the effects on the injured person.
Insurance Options With Tort Liability States
Although individuals can always purchase additional insurance coverage for specific expenses, you see many states that follow the tort system, which requires residents to carry liability coverage for car accidents. These usually address the medical costs and property damage to the other driver if you are at fault.
General liability insurance coverage typically doesn’t include coverage for the costs of your own serious injuries, regardless of who is at fault. To provide financial protection for yourself in at-fault states, it’s recommended to purchase specific coverage with high enough limits to address your risks.
The limit of any policy is the monetary threshold for payout on insurance claims. In some situations, these amounts aren’t enough to cover property damage liability or medical claims. No-fault car insurance has limits, yet it doesn’t matter who’s responsible for the accident; the insurance coverage will pay.
However, in a tort state, if you are at fault in an accident, your limits may not be enough to take care of the other parties. If you aren’t at fault, the other driver may not have insurance or enough coverage to address your costs. In this case, you would be stuck paying for the accident out-of-pocket. Checking with your insurance company about bodily injury liability coverage and underinsured motorist coverage can prevent this unfortunate situation.
Get More Answers About True No-Fault States
PIP insurance covers the financial stresses that come from living in a true no-fault state, although you can secure your own PIP coverage regardless of state mandates. If you have questions about your collision coverage, no-fault laws, insurance providers, or your unpaid insurance claim, a qualified legal professional may be able to help. Visit 1800AskGary today to learn more.