No-Fault Insurance
An auto insurance system in which each driver's own insurer pays their medical costs and lost wages after a crash, regardless of who caused it.
Overview
Massachusetts introduced the first no-fault auto system in the United States in 1971, and about a dozen states now use some form of it, requiring personal injury protection coverage and limiting the right to sue the at-fault driver unless injuries cross a monetary or verbal threshold such as serious injury or permanent disfigurement. The idea was to pay injury claims faster and cut litigation costs. In practice, high medical costs and fraud pushed premiums up in states such as Michigan, which until a 2019 reform required unlimited lifetime medical benefits, and Florida and New York have wrestled with staged accident rings. Property damage remains generally fault based even in no-fault states.
Related Topics
Auto Liability Coverage
Split limits such as 50/100/50 mean 50,000 dollars per injured person, 100,000 per accident, and 50,000 for property damage. Nearl...
Collision Coverage
It pays actual cash value regardless of fault, subject to a deductible of 250 to 1,000 dollars, with higher deductibles buying low...
Comprehensive Coverage
Covered perils include fire, falling objects, vandalism, glass breakage, and deer strikes, which total near a million US claims a ...
Personal Injury Protection
Mandatory in roughly a dozen and a half US no fault states, it typically carries limits of 10,000 to 50,000 dollars and covers pas...