No-fault, also known as personal injury protection, is a type of coverage on your auto insurance policy which is required in some states to cover economic damages related to an injury. Each driver uses their required personal injury protection coverage to pay for their medical bills and lost wages. The driver who is responsible for the accident uses their insurance for any automotive damage and the innocent driver can pursue pain and suffering through the at fault driver’s insurance.
Assigning blame is the name of the game after a car crash. If you can prove the other driver caused the accident, meaning the other driver was at fault, then you can get them to pay for the damages. At least that’s the way it works in most states.
But who pays for claims in a no-fault state? That’s where things get a little more complicated. If you live in a no-fault state or were involved in an accident in one, it’s important to learn how it affects liability for everyone involved. That’s where this guide comes in.
But First, What Is No-fault Insurance (aka Personal Injury Protection Insurance)?
No-fault insurance means that in the event of a car accident, each driver is responsible for paying their own medical bill through their insurance. This requires an extra layer of protection known as personal injury protection (PIP), making insurance more expensive than in at-fault states.
States use no-fault insurance in an attempt to keep personal injury lawsuits from clogging up the courts. If all drivers are required to have PIP, then they are less likely to seek damages from the other party.
The process for claiming damages in a no-fault state is similar to at-fault states, only you won’t be dealing with the other driver’s insurance:
- You’ll notify your insurance that you were injured in an accident.
- Their insurance adjuster will speak with you regarding your claim.
- You’ll provide them with your relevant medical records.
- You’ll submit all expenses related to your injury.
- You’ll negotiate with your insurance company for payment for medical bills and lost wage reimbursement.
Personal injury protection insurance generally excludes damages related to pain and suffering, so you won’t be including things like emotional distress or inconvenience in your claim.
“Personal injury law firms generally only help recover money for bodily injury — and unfortunately that does not include the body of your car. The reason boils down to a personal injury lawyer’s incentive: the money they make. Traditional PI lawyers are not incentivized to help you repair your car. This is because the settlement you get at the end of your case, which your attorney gets his fee on, does not include damages to your car." — Mighty's take
And an Overview of Fault vs. No-fault States
States that assign fault to one party for medical costs are known as tort states. They work by making the at-fault driver responsible for paying both medical and vehicle repair costs for the injured party. They use bodily injury liability insurance and property damage liability insurance in lieu of PIP.
So, Who Pays for Car Damage in a No-fault State?
Since no-fault insurance only applies to bodily injuries, the driver who is at fault for the accident is still responsible for the damage to the other driver’s property.
Personal injury protection insurance applies to:
- Medical bills
- Out-of-pocket expenses
- Lost wages
- Funeral expenses
- Essential services, like child care and yard work
So, how do you go about getting your car repaired in a no-fault state? Here are your options.
Scenario 1: You Use Your Collision Coverage or Comprehensive Coverage
Depending on how the car was damaged, you can make a claim to your insurance provider through your collision or comprehensive policy.
- Collision coverage pays for damage to your vehicle that was caused by another vehicle or object. Hitting a wall or guardrail would be considered a collision.
- Comprehensive coverage pays for damage to your vehicle not stemming from a collision. Theft and vandalization fall under comprehensive policies.
Speaking with your insurance company can clear up any confusion surrounding which policy applies to your specific car accident.
This coverage is optional and not cheap, so you’ll need to decide in advance whether or not the added protection is worth it.
Scenario 2: You Use the At-fault Driver’s Auto Insurance Policy
If the other driver is determined to be at fault for the accident, you can use their insurance policy to pay for your car repairs.
Their insurance provider will want to be sure their driver was at fault, so they’ll investigate your claim. You can help your case by having a police report that backs up your story and by documenting the scene of the accident with pictures or video.
If it’s unclear who is at fault for the accident, you can expect the insurance company to put up a fight.
Scenario 3: A Lawsuit Determines Who Pays
In the event of a coverage or liability dispute, you may need to resort to filing a lawsuit.
This is more complicated than going through insurance, so it’s recommended to bring in a qualified lawyer to assist you through the process.
Even in no-fault states, drivers who cause an accident can still be responsible for some personal injuries. If your injuries are eligible, you’ll need to claim them in the lawsuit from the very beginning. This is where a lawyer can step in and ensure you don’t accidentally waive your right to expensive damages.
“...insurance companies often prolong the legal process, waging a war of attrition to get plaintiffs to accept quick, less-than-fair settlements. This happens even in the most clear-cut cases. It's called "frivolous defense," a phrase you will have heard much less frequently than "frivolous lawsuits," even though many scholars believe it is the former that causes our courts to clog, not the latter." — Mighty's take
And How Does Negligence Impact Liability?
Negligence is the deciding factor in determining liability for a car accident, and this even applies to a degree for a no-fault accident. If it’s not immediately clear who caused the accident, the insurance companies will use the evidence surrounding the case to piece together a narrative.
Negligence can be applied in several ways and can have a major impact on your claim:
- Pure contributory negligence: You’ll be barred from recovering damages if you contributed to the accident in any way.
- Pure comparative negligence: You can recover damages if the other party was even 1% at fault for the accident. Your recovery is reduced by your percentage of negligence.
- 50/50 comparative negligence: You can recover damages if you’re 50% or less at fault, but the amount you can recover is reduced by your percentage of liability.
- 51/49 comparative negligence: You must be less than 50% at fault to recover damages and the award is reduced by your liability.
How negligence is applied to your claim will depend on the laws in your state.
Suing Another Driver
Yes, you can sue in a no-fault state, but it needs to meet certain standards. Just because no-fault insurance is in place to reduce personal injury lawsuits doesn’t mean they’re ruled out entirely. There are certain situations where you can recoup losses by suing the other driver.
No-fault insurance places a cap on how much it is able to cover. If your lost wages or medical expenses exceed the amount your PIP insurance covers, you can sue the other driver for the difference. You can also sue if the severity of your injuries exceed the state’s injury threshold.
In a similar vein, if the car accident has diminished your earning potential or will likely lead to future expenses, you can hold the other driver responsible.
Suing Third Parties
In some cases, accidents can involve more than just you and the other driver. If a third party played a role in the accident, then they can and should be held responsible.
Third-party involvement can include:
- An auto shop failing to properly repair a vehicle
- A local government failing to maintain traffic signals
- Another driver dropping debris on the road
- The vehicle manufacturer producing a faulty car part
If your accident included a similar scenario, then you may be entitled to more damages than what first appeared. There is a statute of limitations concerning lawsuits that’s determined by the state the accident occurred in, so you should act fast to preserve your claim.
Labeling states as fault or no-fault is a bit misleading, and has understandably led to a lot of confusion regarding liability. So, who pays for car damage in a no-fault state? Generally, it’s the person or people responsible for causing the accident. The only damages no-fault settlement money applies to are those regarding bodily injuries.
FAQs About Who Pays for Car Damage in a No-fault State
Still confused about who pays in a no-fault accident? These common questions might help clear things up.
Does Insurance Cover Things That Are Your Fault?
If you live in a tort state, your liability insurance will cover bodily injuries and property damage if the accident was your fault.
In no-fault states, each driver’s personal injury protection insurance will cover their own injuries, regardless of who caused the accident.
How Do Insurance Companies Determine Who Is at Fault?
Insurance companies apply the laws of the state in which the accident occurred to help determine who is at fault. They also review evidence surrounding the case to inform this decision, which is why it’s important to get a police report and statements from witnesses.
Does the Police Report Automatically Go to Insurance?
A police report is not automatically sent to insurance companies after a car accident. Insurance companies will request a copy of the police report to help inform them of what occurred. They will then use that information while negotiating the no-fault car accident settlement to defend their offer.
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