No fault insurance means your auto insurance provider guarantees a certain payment no matter whether you or the other driver was the individual responsible for the cause of the accident. You may have heard of Personal Injury Insurance (PIP). PIP insurance used synonymously with no-fault insurance.
No fault auto insurance requires drivers to carry auto insurance for their own protection and places a limitation on the ability to sue other drivers for damaged caused in an accident. No fault auto insurance was created in an effort to cut down on expensive legal costs and excessive damage settlements.
Some States require no fault auto insurance while other States offer their drivers the option to carry no fault auto insurance. If you are not sure if no fault insurance is mandated or offered in your State, contact a local insurance representative or contact the Bureau or Department of Motor Vehicles or check their website.
Currently the following States require no-fault auto insurance:
- New Jersey
- New York
- North Dakota
The following States currently offer the option of no-fault auto insurance coverage:
- New Hampshire
- South Dakota
- Washington DC
Laws vary depending on the State, but basic premise of no fault insurance is the same, when you are involved in an automobile accident, your insurance company pays for any injuries/medical expenses that you sustain as a result of the accident. The other driver(s) involved in the accident will have their injuries/medical expenses covered by their insurance company.
In a State where no fault car insurance is required, your insurance company will pay to repair your vehicle and your insurance company may or may not contact the insurance company of the other driver(s) involved to recover their costs. This is done behind the scenes; insurance company to insurance company and does not involved the insured driver(s).
In a State where no fault auto insurance is offered, though not mandated, and you opt for this coverage, a driver involved in an accident can have their insurance company fix their vehicle or they have the option to the other driver’s insurance company handle the details thus not reporting the accident to your insurance company and not paying the required deductible.
No fault auto insurance coverage, it will typically cover the following costs:
- Loss of wages or services incurred as a result of the accident.
- Medical expenses incurred as a result of the accident.
- Funeral expenses.
- Death benefits.
No fault auto insurance will not pay for the following:
- Pain, suffering, emotional distress, and inconvenience that may result from injuries incurred during an accident.
- Damaged incurred to vehicles or other property damaged as result of an accident.
No fault insurance also limits the ability for you to sue other drivers for damages but also protects you from being sued for damages by other drivers in most cases.