There are over 6 million car accidents each year in the United States alone! Car crashes are something that you need to be prepared for in your life, which means understanding the rules surrounding a no-fault state.
You are probably wondering, “what does a no-fault state mean?” Don’t worry though, we have got you covered! This article will give you all the information you need to educate yourself on the ins and outs of dealing with an accident in a no-fault state.
Let’s get started!
At-Fault State
Before we jump into what a no-fault state is, let’s cover the traditional at-fault state. An at-fault state is also known as a tort state. In these states, the person who is responsible for the losses is the one who must cover the costs. This includes medical bills, vehicular damages, and more.
Generally, in at-fault states, a police officer will determine who is at-fault in the accident by gathering evidence, interviewing witnesses, and using other means. In these states, your insurance policy must also include liability. Liability insurance does not cover the losses for the person responsible; it only covers the losses for the other person involved in the accident.
In most cases, the person responsible for the accident will be sued by the other party for additional damages. Having appropriate insurance is crucial.
No-Fault State
A no-fault state works much differently. These states require that a driver must hold insurance to protect themselves rather than others’ losses during an accident. This means that if an accident were to occur, no driver is held at fault for handling the cost of the damages of the other party.
Because the driver’s fault is irrelevant in these states, it is often required that drivers also have personal injury protection plans on their policy. If the extent of the damage is astronomical, some states do allow drivers to file lawsuits against the other party; however, that is not the case for all no-fault states.
Having an attorney on hand is good practice for situations like this. Read on here to learn more.
The Bottom Line
The central differences regarding an at-fault versus no-fault state boil down to who is responsible for damages. Additionally, whether or not a driver can sue the other party is also a factor to consider. There are obvious pros and cons to both options, but in the end, everyone is still covered by either their policy or the other party.
Understanding No-Fault States
The no-fault state idea is designed to help lower insurance rates for policyholders by keeping small claims out of the court system. The level of protection the policyholder wants to receive lies in their hands when choosing their coverage.
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