No Fault Insurance – The Basics

No-fault insurance can be interpreted one of two ways, depending on where you live. In 16 states, the judicial handling of car insurance claims are not handled through the traditional tort system but are handled by a system known as no-fault insurance. In other states, no-fault insurance is applied to cases where there is no clear at-fault person or only a single vehicle involved.

No-fault states take a different approach to paying for auto claims: Each driver’s insurance pays for the bodily injury of the driver and his passengers immediately, and insurance companies negotiate the fault and percentages behind the scenes, called subrogation. Another term for the coverage is Personal Injury Protection because its primary goal is to be sure that injured people receive the care they need regardless of who is to blame.

In states that use the traditional tort system, Personal Injury Protection, or No-fault, can be purchased in addition to the state required minimum. In this case, the coverage is used to cover damages to the car when it is parked, for injuries to the driver and her passengers and to reimburse the insured driver for lost wages and other costs associated with the accident.

Even if you are required to have No-fault insurance in your state, you should also consider some other coverage, including property damage liability and collision coverage. No-fault is called Personal Injury Protection because the focus is on medical care, and any claims outside of medically related ones should be covered by a different coverage.

One of the best ways to shop for no fault insurance is to use websites that offer free online quotes. This method will let you design the policy so that it the most beneficial to you and then compare the same coverage across a number of insurance providers. You save time by not having to re-enter the same policy needs on many different sites, and money by finding the lowest rates on the coverage you need from a single website.

Posted in Car Insurance.