How does no-fault car insurance work after a car accident?


How does no-fault car insurance work after a car accident?


If you live in one of the states that follow some variation of a no-fault car insurance system -- that’s the District of Columbia, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah -- you’ll need to play by a different set of rules if you’ve been injured in a car accident (no-fault rules don’t apply to vehicle damage claims).

You’ll need to turn first to your own car insurance policy (usually known as personal injury protection or PIP coverage) to get compensation for medical treatment and lost income stemming from the accident, up to a certain limit. It doesn’t matter who caused the car accident (they don’t call it “no-fault” for nothing). For minor injuries, that’s usually the end of the story; your claim is resolved with your own insurance carrier. Plus, you can’t get non-economic damages, which includes compensation for pain and suffering.  

But if your claim meets the threshold in place in your state, either because your injuries are serious enough or because you’ve incurred medical bills above a certain dollar limit, you’re allowed to step outside of the no-fault system and file a liability insurance claim or personal injury lawsuit against the at-fault driver. The specifics depend on the no-fault laws in your state, but at this point you’re typically able to recover the full spectrum of personal injury damages, including pain and suffering.

by: , J.D.

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