Each state sets laws determining who handles paying for an accident after it occurs. When two parties collide, determining fault is not always the goal. In some states, each person’s insurance pays for the losses. How does this work? Are you in a no-fault or at-fault state? Here is a breakdown of what this means to you.
What Is a No-Fault State?
In a no-fault state, drivers maintain insurance to cover losses they suffer during a car accident. This type of car insurance covers your own injuries and the damage you suffer. Fault does not matter in this situation. In some states, individuals need to buy PIP coverage as well. This helps cover the medical costs associated with your injuries during an accident.
In some states, individuals can still file a lawsuit against the responsible party if the amount of damage is severe. If the amount of loss exceeds the amount of car insurance available to cover losses, you may be able to file a claim against the responsible driver to recoup your losses. Not all states allow this, however.
What Is an At-Fault State?
Also called a tort state, an at-fault state puts the blame and financial responsibility on individuals. The person responsible for the losses, including medical bills and property damage, is the one responsible for the incident. In these states, usually a police officer determines who is at fault. This decision comes from reviewing witness statements, gathering evidence, speaking to all involved and using a bit of science to determine what happened.
In an at-fault state, you maintain auto insurance called liability insurance. Your policy covers the losses other drivers suffer as a result of your actions or inactions. Liability insurance does not pay for your losses if you are responsible for them, though. Other forms of car insurance may offer some help.
It’s also important to know that in at-fault states if the liability insurance policy does not cover all of the damage, the victim is able to file a lawsuit against you to pay for additional losses. That is why it is so important to have proper auto insurance in place that offers enough protection. You might be able to add extra liability protection to help you respond to these scenarios however.
In all types of situations, your car insurance should match both local laws and your risks. Work with your agent to customize a plan that helps eliminate any risk of a lawsuit.
FAQ’s About What Does It Mean to Be in a No-Fault or At-Fault State?
How many states are no-fault states?
There are currently 12 no-fault states in the US: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, and Utah.
How many states are at-fault states?
The remaining 38 states are at-fault states, although some states have a hybrid system that combines elements of both no-fault and at-fault systems.
What is the benefit of living in a no-fault state?
The benefit of living in a no-fault state is that drivers can receive compensation for their medical expenses and lost wages regardless of who is at fault in an accident, which can help expedite the claims process and reduce the need for litigation.
What is the downside of living in a no-fault state?
The downside of living in a no-fault state is that drivers may be limited in their ability to sue the other driver for damages, as no-fault laws typically restrict the circumstances under which a driver can file a lawsuit.
What is the benefit of living in an at-fault state?
The benefit of living in an at-fault state is that drivers have the option to file a lawsuit against the other driver if they believe that the other driver was responsible for the accident and their injuries.
What is the downside of living in an at-fault state?
The downside of living in an at-fault state is that drivers may face higher insurance premiums if they are found to be at fault in an accident, as their insurance company will be responsible for paying for the damages and injuries caused to the other driver(s).
Is it possible to have both no-fault and at-fault insurance coverage?
Some states have a hybrid system that combines elements of both no-fault and at-fault systems, which allows drivers to choose between no-fault and at-fault coverage options.
How do I know if I live in a no-fault or at-fault state?
You can check with your state’s department of insurance to determine whether you live in a no-fault or at-fault state, or consult with an insurance agent who can provide you with more information about your coverage options.
Do both parties contribute to the damages in a no-fault state?
In a no-fault state, each driver’s own insurance covers their respective medical expenses. However, when it comes to property damages (such as car repairs), the at-fault driver’s insurance would generally cover those costs. It’s important to note that no-fault insurance only applies to personal injury claims, not property damage.
What is the impact of shared-fault accidents on insurance claims?
In shared-fault accidents, where more than one driver shares some responsibility for the accident, the insurance claims process can be more complex. Typically, an insurance adjuster will determine each driver’s percentage of fault, and the claims payout will be adjusted accordingly. In some states, a modified comparative negligence rule applies, whereby a driver’s claim payout may be reduced or denied completely if they are found to be more than 50% at fault for the accident. In other states, a pure comparative negligence rule allows drivers to recover their proportionate share of damages, even if they are more than 50% at fault.