Basics of No-Fault Auto Insurance

Under no-fault insurance, benefits are paid regardless who caused an accident or injuries. However, because of this, you're required to have minimum coverage. This is supposed to keep premiums down because there's less paperwork to file. Currently, several states have a no-fault insurance requirement. Check with your state to see if it requires no fault insurance.

What No-Fault Covers

Also called personal injury protection, no-fault coverage is usually limited. It usually only pays for medical bills and lost income up to the limits of your policy. Pain and suffering and any expenses over the policy limits aren't covered.

If your medical bills and lost wages from the accident are greater than the policy limits, you may be able to collect by suing the person at fault directly. The rules about when you can sue the driver at fault for damages not covered by your no-fault insurance vary by state. Knowing what your current policy covers is critical.

Some state laws say you can sue for serious injuries after your insurance has been exhausted, generally including broken bones, severed limbs, internal injuries and hospitalization. Other states maintain that you can sue if your total medical bills are over a specific dollar amount, this varies by state as well.

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

Pennsylvania and New Jersey have a hybrid no fault system known as an optional modified plan. 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're 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.

Questions For Your Attorney

  • My state requires no fault insurance, but I don't have it and I got into an accident. What should I do?
  • Since I live in Pennsylvania (or New Jersey), how do I know if I signed up for an optional modified plan with limited or full tort coverage? Also, can a private passenger sue even if I have one of these insurance policies?

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