No-fault auto insurance regulations are enforced in certain states. In these states, drivers may lose the ability to sue the other driver following an accident and must report the collision to their insurance provider, regardless of who was at fault.
You must get personal injury insurance in addition to any other types of coverage your state mandates if you reside in a no-fault state. Nearly all states require drivers to have car insurance, but the regulations that apply to you depend on where you live.
No matter who is to blame for the collision, drivers in no-fault states are required to make claims with their insurance providers. And until their medical condition or costs exceed a specific threshold, they probably won’t be able to sue the other driver.
In this reading, we’ll explore how auto insurance works in a no-fault state.
Let’s get started!
How Does Auto Insurance Work In A No-Fault State?
The types of auto insurance regulations include no-fault, choice no-fault, add-on, and tort responsibility. No matter who was to blame for the collision, every driver in states with no-fault laws submits a claim to their insurance provider once it occurs.
What Does It Mean To Be In A No-Fault State?
The right to file a lawsuit after suffering injuries in an automobile accident is also impacted by no-fault insurance legislation. In no-fault states, drivers might not be able to file a lawsuit unless their damages exceed a certain monetary or verbal threshold.
An injury must be of a specific severity that is conveyed verbally in states where there is a verbal threshold (for example, disfigurement). Medical expenses must total a particular amount in states where there is a monetary threshold before a person can file a lawsuit against the at-fault driver.
A type of no-fault law known as choice no-fault law is present in several states. Both typical tort liability insurance and no-fault auto insurance are available to drivers in these states.
How Are No-Fault States Different From Tort Liability States?
Someone injured in an accident they didn’t cause will make a claim with the at-fault driver’s insurance company rather than their insurer in areas where tort liability is the law.
There are no limitations on someone’s right to sue after an accident; thus, the injured party may also bring a claim against the at-fault motorist for any pain and suffering or out-of-pocket medical expenses.
How Does Add-On State Work?
Add-on states essentially combine tort liability laws and no-fault legislation. States with add-on legislation require drivers to file claims with their own insurance companies following an automobile accident, much like no-fault states do.
However, like states with tort responsibility, add-on states don’t impose any limitations on a driver’s capacity to bring a lawsuit to collect damages for injuries sustained in an auto accident.
What Insurance Is Typically Required In a No-Fault State?
Except for PIP, no-fault states may require some of the same coverage as tort liability states. Drivers are obliged to have PIP in states with true no-fault policies. PIP coverage could also be required by add-on insurance requirements in some states.
After an accident, PIP coverage may assist in paying for your or your passenger’s medical expenses. Additionally, it might assist with accident-related expenses, including lost earnings and burial costs. You can be forced to get these kinds of coverage in addition to PIP.
- Liability insurance
- Uninsured or underinsured motorist coverage
- Comprehensive or collision coverage
Liability Insurance
Nearly all states mandate both bodily injury liability and property damage liability insurance. The only two exclusions are in Virginia and New Hampshire. If you cause an accident in New Hampshire without liability insurance, you must show that you can pay for damages.
Virginia’s Department of Motor Vehicles allows you to forgo liability insurance for an annual fee. If you’re sued after causing an accident that results in injuries that match a predetermined level, as determined by your state, residual bodily injury liability coverage may be able to help defend you in some no-fault states.
In the event of a collision, property damage liability insurance can assist in covering any damage you may have caused to another person’s vehicle or property.
Uninsured or Underinsured Motorist Coverage
Uninsured and underinsured motorist coverage may assist in covering the costs of injuries brought on by hit-and-run drivers, drivers who don’t have the bare minimum of liability insurance, or drivers who don’t have any insurance at all. If your PIP benefits have been used up and the other motorist doesn’t have adequate bodily injury liability coverage to pay for your medical bills, this form of coverage may take effect.
Some states mandate the purchase of uninsured and underinsured motorist coverage. To determine whether your state would require uninsured and/or underinsured motorist coverage, look at this chart produced by the Insurance Information Institute.
Comprehensive or Collision Coverage
Although comprehensive and collision insurance aren’t required by law, the leasing company or lender may insist that you buy these if you finance or lease your car. In the event of an accident, this coverage safeguards their investment in the vehicle.
Which state has no insurance laws?
No-fault insurance regulations exist in the following states and territories:
- Florida
- Hawaii
- Kansas
- Massachusetts
- Michigan
- Minnesota
- New York
- North Dakota
- Puerto Rico
- Utah
Three states have chosen no-fault insurance laws:
- Kentucky
- New Jersey
- Pennsylvania
The following states have add-on insurance laws:
- Arkansas
- Delaware
- Maryland
- New Hampshire
- Oregon
- South Dakota
- Texas
- Virginia
- Washington
- Wisconsin
Drivers in the District of Columbia have the option of tort or no-fault insurance. A person who previously selected no-fault coverage has 60 days following a vehicle accident to determine whether to continue receiving no-fault benefits or to make a claim against the at-fault driver.