How Do Car Accidents in No-Fault States Work?

• (Photo : Image by Michael Gaida )

If you haven't already, at some point in your life if you drive, there's a pretty good chance that you'll be involved in a car accident. There are an average of six million annually in the United States alone, and one of the first questions that you'll have if and when it happens, is "whose fault was it?" But determining fault isn't always that easy, and in states with no-fault insurance laws, the whole process works a bit differently.

In most states, if you're involved in a car accident and are injured, you'll have the option to bring a claim for compensation against the driver who was negligent, usually through the driver's auto insurance company. Under those circumstances, you'll have to convince their insurance company that its insured was the driver at fault for the accident as part of the claims process. That must be done before you can collect any damages for injuries, and it can be very long and complicated. Even if you submit all documents the insurance company requires, like witness statements, photos and police reports, the claim might still be denied, requiring you to contact a car accident attorney so that a lawsuit can be filed.

It's due to this lengthy, expensive and time-consuming process that some states have instituted what's referred to as "No-Fault" insurance coverage.

So what happens if you get into a car accident in a no-fault state?

Drivers in no-fault states are typically required to carry what's known as personal injury protection, or PIP. After an accident occurs, the driver's own insurance pays for their medical-related expenses up to a certain amount. Property damage, however, is still fault-based, so the cost of any repairs can still be covered by the insurer of the driver who was at fault.

The procedure for submitting insurance claims is much more streamlined in no-fault states. You simply submit a claim to your insurance provider which will then pay damages to you for injuries you've suffered, regardless of who was at fault. You won't have to worry about the claim being denied or proving to the other insurance company that their driver was at fault and not you. Not only is it usually less stressful and time-consuming, but it reduces monetary costs associated with litigation and lengthy insurance claims. The claims are usually paid a lot quicker and with a lot less hassle.

Keep in mind that each no-fault state has its own variations on the system. Some allow you to choose whether you want to be insured under the traditional liability-based insurance system or the no-fault system when you purchase an insurance policy. Each one also has varying rules as far as what type of damages can be pursued and covered in no-fault claims. The bottom line is that it's important to do a little research into your own no-fault state to determine how the system works.