Basics of No-Fault Auto Insurance

Some states are adopting a no fault auto insurance system which requires you to have minimum insurance in the event you're injured. Your insurance company automatically pays for your damages, regardless of who is at fault for the accident. This theoretically keeps insurance costs down and makes it easier to process claims. Currently, no-fault insurance is required in Colorado, Florida, Hawaii, Kansas, Kentucky, Massachusetts. Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah.

If you have no-fault insurance coverage - also called "personal injury protection" or "PIP" - chances are the coverage is pretty limited. No-fault insurance usually only pays for your medical bills and lost income up to the limits of your policy. Your pain and suffering, as well as medical bills over the policy limits, won't be covered.

If your medical bills and lost wages are greater than the policy limits of your insurance, you may be able to collect from the driver at fault by suing them directly, under certain circumstances. The rules on whether you can sue the driver at fault for damages not covered by your no-fault insurance vary from state to state.

In some states, lawsuits against drivers at fault after your no-fault insurance has been exhausted are limited to "serious" injuries or death. "Serious" means something different in each state, but generally includes broken bones, severed limbs, internal injuries requiring hospitalization, etc.

In some states, you can only bring a lawsuit against the driver at fault for damages not covered by your no-fault insurance if your total medical bills are over a specific amount (which varies by state).

Choice No Fault

In Pennsylvania and New Jersey, a hybrid no fault system known as "choice no fault" exists. In these states, you may choose to be insured under a strict no-fault plan, in which case you're unable to sue an at fault driver and also can't be sued if you're at fault. Or you can choose not to take out no-fault insurance, and be able to sue other drivers. Of course, then you may also be sued if you are at fault for an accident.

A qualified lawyer in your local area will be able to tell you what kind of claim you may have and whether collection against the driver at fault is a possibility.

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