Currently, there are 13 no-fault states in the U.S. These include Florida, Kentucky, Michigan, New Jersey, and New York.
If you live in a no-fault state, it means that a driver has to first file a claim with their own insurance company if they’re in an accident.
Every state sets its own laws as far as who pays for an accident. Sometimes when there’s an accident involving two parties, the goal isn’t determining fault.
The following are specific things to know about living in a no-fault state.
Overview of a No-Fault State
If you live in a no-fault state, as a driver, you’re required to have insurance to cover losses you might incur because of a car accident. Insurance in a no-fault state will cover your injuries and the damages you suffer, regardless of fault. You may also need to buy Personal Injury Protection or PIP coverage too, depending on where you live.
PIP covers the medical costs stemming from your injuries from the accident.
In some no-fault states, individuals might be able to file a lawsuit against the party that’s responsible if there’s a severe amount of damage.
If you incur a loss that’s more than the amount of car insurance available to cover losses, you might be able to file a claim against the driver who is responsible. This isn’t allowed in every state.
You may have a right to sue in a no-fault state if there are severe injuries or your case meets certain conditions. The conditions are known as a threshold, and they’re based on the severity of the accident.
This contrasts with an at-fault state, which is also known as a tort state.
What Is an At-Fault State?
In an at-fault state, financial responsibility falls on the individual.
If you’re responsible for losses, which may include both property damage and medical bills, then you’re the one who’s financially responsible for the accident. Most of the time in at-fault states, the responding police officer will make a determination of fault. The decision might come from what the officer sees at the scene as well as evidence, witness statements, and sometimes the use of science as well, to reconstruct what happened in the accident.
If you live in an at-fault state, you have liability insurance. Your policy covers the losses you might cause another driver to suffer because of your inaction or action. If you’re responsible for the accident, liability insurance doesn’t pay for your losses.
If you live in an at-fault state, and your liability insurance doesn’t cover all of the damage, then the accident victim may have the opportunity to file a lawsuit against you to cover additional losses.
Other Types of Insurance Systems
Along with no-fault and at-fault, there is choice no-fault. In a choice no-fault state, you can select either a no-fault car insurance policy or a tort liability policy.
In a tort liability state, there are no restrictions on lawsuits. If you’re in a car accident and someone else’s at fault you can sue for pain and suffering out-of-pocket expenses.
Then, there are add-on states.
In an add-on state, you would receive compensation from your own insurance company as you would in a no-fault state, but then there are no restrictions on lawsuits.
Cooperating with Your Insurance Company
There’s a big distinction to understand if you’re in a no-fault state as far as how you deal with your insurance company after an accident.
If you’re in an at-fault state, you might not provide a recorded statement or say too much to the insurance company of the other party.
However, under state law in most no-fault states, you are required to cooperate with your own insurance company.
You may have to provide your insurance company with a recorded statement, and you may need to go to a medical exam with a physician from the insurance company. If you don’t cooperate with the insurance company, they may be able to deny your claim.
If you live in a no-fault state, one of the most important things you can do is take your time when it comes to choosing your auto insurance. Not having proper coverage when you live somewhere with no-fault laws can be incredibly costly, and it may open you up to fines or criminal liability.
Make sure you’re meeting all the required minimums for your insurance company, and you may want to protect yourself beyond those minimums in a no-fault state as well.