What Is “No Fault” Auto Insurance

What Is “No Fault” Auto Insurance

  • Published: Jan 01, 2020

States that practice no fault insurance system
In many states, you can purchase no-fault insurance. It broadly means that the car insurance company will pay for the damages that are caused by the accident of car irrespective of who’s a fault it was. In 12 states out of 50 states, you can purchase or use this kind of car insurance. While other states don’t allow this kind of car insurance and have liability insurance where a person can be legally responsible for the damages and payments arising out of the car accident.

These states are FL, MI, NJ, PA, HI, KS, KY, MA, MN, ND and UT. In these states, in addition, the state laws place a restriction on seeking monetary damages from the car owners or the operators of the cars that were involved in the accident. Look for the car insurance quotes online and then comparing the rates. Get the cheapest car insurance policy in these states by going comparing the online quotes.  For these reasons many purchase gap insurance.

Who can sue for damages and payments under this system?
In this system, the person who has incurred the medical payouts is only allowed to sue for the damages and not everyone who has been involved in the accidents. Only if a person has had serious injury can they seek to claim the damages? In Kentucky, New Jersey and Pennsylvania, car owners can opt to have “no fault” car insurance and at-fault car insurance.

Default options at the time of purchasing the car insurance policy
This option is given at the time of signing a new contract or at the time of the renewal of the car insurance. But it can’t be changed midway through the policy. By default, the “no fault” option is assigned to those that opt for car insurance policies in Kentucky and New Jersey. However, those that are in Pennsylvania are given the “at fault” car insurance policies by default.

Speedy disbursal of payouts
“No fault” car insurance provides for quick and speedy disbursal of claims and payments for injuries. It reduces the insurance premiums as it reduces the incidence of the lawsuits that arise out of car accidents.

What is liability insurance?
The at-fault system for car insurance, the fault is determined by the legal principles of “proven negligence”. This means that if you cause a car accident, you are legally responsible for the damages. This is known as the “at fault “ system or liability insurance.