No-Fault Insurance States List
In no-fault insurance states, drivers are compensated for medical expenses and income-related costs after being involved in a car accident – regardless of who was at fault.
As a rule, after the accident has occurred, the insurance company’s job is to determine who was at fault and how the injured party can be compensated for the damage and injury caused.
No-fault insurance pays for those costs and helps the driver cut back on out-of-pocket costs.
Some might not realize about no-fault coverage, though, that these no-fault insurance laws vary by state. So, we’ll be dealing with that in more detail today.A no-fault state insurance state allows drivers to file a claim with their auto insurer who pays for the damages up to a certain limit. Click To Tweet
What Is No-Fault Insurance?
First, let’s take a quick moment to reflect on what no-fault auto insurance means to you, the drivers.
If you sustain any injuries in an auto accident, your auto insurance covers your medical bills – and any additional costs that you would have to pay out-of-pocket.
No-fault insurance claims are made through your personal injury protection coverage.
Mind you, personal injury protection (PIP) insurance is mandatory in no-fault states. However, you can always choose to purchase this insurance even in states where it is not mandatory.
In some states, no-fault insurance is required by law, as well as participating in the no-fault scheme when filing a claim. In other states – mainly “choice” no-fault states – the driver can choose to go with a liability insurance-based coverage instead, either when filing or purchasing a car insurance policy.
Either way, remember that insurance laws are generally strict in no-fault states and involve a verbal or monetary threshold.
Currently, 12 states in the US require drivers to purchase a no-fault auto insurance policy.
Here’s a list of those 12 states:
While reviewing, you should take into consideration that general car insurance laws vary by state, and thus, no-fault laws have been further categorized into:
- “Pure” or “true” no-fault laws
- “Choice” no-fault laws
- “Add-on” no-fault laws
“Pure” Or “True” No-Fault States
“Pure” or “true” no-fault states offer policies where the driver pays the first-party benefit to the other driver and passenger(s). Here, the drivers are usually denied suing rights.
Within the no-fault insurance system, no-fault benefits (first-party benefits) apply to the driver’s insurance company and its obligation to cover the medical costs for the injured person (or people), regardless of whose fault the car accident was.
The following states (including Puerto Rico) abide by a “pure” no-fault law:
- New Jersey
- New York
- North Dakota
- Puerto Rico
“Choice” No-Fault States
In a “choice” no-fault state, the driver is offered a choice between the “pure” no-fault insurance coverage and the traditional tort liability policy, meaning they could retain their right to sue.
The states that conform to “choice” no-fault insurance laws are:
- New Jersey
Ultimately, if you choose the “pure” no-fault system, you’re denied suing rights. Contrary to that, retaining your tort right allows both drivers to sue each other for medical expenses and non-economic damage.
“Add-On” No-Fault States
Finally, we have the “add-on” states that represent a blend of the previous two.
As with a regular car insurance policy, the driver has the right to sue. However, first-party benefits can be added to the policy. That essentially means that the driver’s own insurance company would pay for insurance-related costs – including medical bills and other expenses.
The following states comply with “add-on” no-fault insurance laws:
- District of Columbia
- New Hampshire
- South Dakota
What To Remember:
The driver should keep in mind that these laws are subject to constant legislative change – that applies to no-fault states, at-fault states, and tort liability states alike.
As a case in point, Pennsylvania passed a no-fault law during the 1970s, repelled in the 1980s – only to pass it again in 1990. The point is that you should keep up with the existing laws in your state.
How Does No-Fault Insurance Work?
As with many other policies, no-fault car insurance rates aim at reducing expenses and the possibility of lawsuits occurring. Regardless of who caused the accident, everyone involved will be required to file a claim with their own insurance companies.
A no-fault state allows you to sue the other driver and pursue legal actions – but only if a certain verbal or monetary threshold has been met.
Regular no-fault car insurance consists of the following coverages:
- Bodily Injury Liability Coverage
- Property Damage Liability Coverage
- Personal Injury Protection Coverage
Bodily Injury Liability (BI) Coverage
Bodily injury liability coverage helps the driver that caused the accident pay for the injuries caused to the other party. This coverage doesn’t cover your own medical expenses and costs to your passengers that have been injured, though.
Bodily injury liability coverage is mandatory in all 50 states, excluding New Hampshire.
Property Damage Liability (PD) Coverage
Property damage liability insurance helps drivers pay for the damage caused to the other driver’s car or property. Usually, it’s beneficial in covering repair costs of the vehicle, fence, or building.
This liability coverage is a mandatory part of auto insurance in many states.
Personal Injury Protection (PIP) Coverage
Personal injury protection (PIP) insurance can be of much help since it allows the driver to file a claim for medical and other expenses, including lost wages – all resulting from the auto accident.
With PIP coverage, it doesn’t matter whose fault the accident was. Even more so, your PIP coverage can also help pay for lost wages or reimbursement if you had to hire someone new.
What’s the minimum for PIP?
Usually, the state sets the minimum requirements for this type of no-fault coverage. While insurance laws can vary, you can generally have $10,000, $20,000, or even $50,000 in PIP coverage.
It’s worth noting that not every no-fault state that does require PIP coverage is considered a no-fault state, though.
Comprehensive And Collision Coverage
Here’s the deal:
Your car insurance agent will negotiate towards purchasing this liability insurance as a way to protect their investment in the vehicle.
Filing A Claim With Your Insurance Company
Suppose that you’ve been in an auto accident. In that case, you need to make a decision – whether you want to file a claim with your insurer or not.
Remember, filing a claim may be necessary if you find yourself in a situation where one of your passengers was injured.
In case you decide to file a claim, the absolute first thing you’ll need to do is contact the car insurance carrier from which you purchased the policy and file an injury-related claim. Of course, you’ll be required to provide details regarding the accident.
After providing the necessary documentation, your insurance carrier will further process your claim.
Who Pays For The Damage In No-Fault States?
Subsequent to the no-fault system, your insurance providers pay for the damage caused and your own medical bills up to a certain limit. Here, the insurance company covers most of the expenses that result from auto accidents.
An evident advantage here is that no-fault insurance covers damages without requiring proof, as in at-fault states, where the driver at fault is liable for the costs of the accident.
Similar to this, in tort liability states, someone is held responsible for the accident, even if the realistic picture of the accident and responsibility is split 50/50.
The Effectiveness Of No-Fault Insurance
The main benefit you should be looking at is the time required to file a claim.
Filing a claim can be resolved within days – without having to fly back and forth between insurance companies. Drivers enjoy the advantage of going straight to their insurer and resolving the expenses that need to be paid.
That speeds up the entire process and saves you from unwanted legal costs.
Drivers who live in a no-fault state can get compensated for medical expenses and income-related costs by filing a claim with their chosen insurance provider.
Having no-fault coverage helps drivers cover insurance costs in the sense that it covers medical bills and income-related costs that they would otherwise pay out-of-pocket. A key factor of this insurance policy is that it restricts the driver’s right to sue.
Currently, 12 states in the US require drivers to purchase this insurance policy. That said, the insurance laws vary by state and can therefore be further categorized into “pure,” “choice,” and “add-ons.”
These laws are subject to legislative change, and some carriers might still require you to purchase full comprehensive and collision coverage.
At Insurance Geek, auto insurance is one of our many specialties. We’ve dedicated our time and effort to helping you find the best quotes and connect you with the most respectable auto insurance carriers in the US.
Don’t hesitate to reach out to Insurance Geek for more information on your no-fault policy!