What Is a “No-Fault” State and How Does It Apply to Out of State Drivers?

If you’re involved in a car accident, you’ll probably end up dealing with an insurance company policy at some point. In two-thirds of the United States, the driver who causes your accident bears financial responsibility — usually through their insurer — for injuries and other losses.

However, in the other third of states, the car insurance process begins and usually ends with a no-fault car insurance claim. This claim is made through your coverage. Some states use a hybrid or choice no-fault system that gives claimants options.

A West Palm Beach car accident attorney can help you to understand the basics of no-fault — also known as “personal injury protection” or “PIP” – car insurance, the thresholds for stepping outside of no-fault and filing a claim against the at-fault driver, and no-fault/PIP coverage as add-ons in liability states.

Liability-Based Car Insurance

Under fault or liability-based car insurance systems, if you’re injured in a car accident, you typically have the option of bringing a car accident claim against the at-fault driver. These claims are typically covered through the other driver’s insurance company.

Usually, you’ll need to convince the other driver’s insurance company that its insured driver was at fault for the car accident. Proving fault can be a complicated and drawn-out process. This process can involve police reports, witness statements, photographs, and other forms of evidence. Even with evidence, an insurer may still deny your claim.

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No-Fault Car Insurance

The term “no-fault state” typically refers to states with laws mandating that financial responsibility for injuries and other certain losses resulting from a car accident comes from the injured person’s car insurance coverage. This means your own insurance covers your damages, regardless of who caused the accident.

No-Fault Car Insurance Claims

If you live in a no-fault car insurance state, the procedure for submitting an insurance claim is simple. Instead of filing a third-party claim with the negligent driver’s insurance company, you will submit your claim to your insurer. Your insurance company then pays compensation for certain financial losses related to your car accident injuries.

Out-of-State Coverage

If you are in an accident out of state, your coverage limits will adjust to meet whatever is required in the state where your crash occurred. If you’re involved in an accident in a state that requires lower liability limits than your home state, your insurance policy will not decrease to meet that state minimum.

If The State Isn’t “No-Fault”?

Florida is a no-fault state, meaning that a driver’s personal injury protection (PIP) pays for their injuries regardless of who was at fault. Getting into an accident in another no-fault state will mean that your PIP coverage will still pay for your injuries.

If you’re in an accident in a state that does not use a no-fault system, then the negligent driver will be held responsible for your injuries instead of your PIP coverage. This means the laws in the state where your accident occurred would govern how the case is resolved. The at-fault driver’s insurance policy would determine how medical benefits and lost wages are paid.

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If a liability-state-based driver was hit by a Florida driver in the no-fault state of Florida, the tort-law-based resident’s insurance policy would provide them with the minimum PIP coverage required in Florida. Each case is unique, but generally, the state in which the accident occurred will have governing laws of minimum liability coverage, fault, and the statute of limitations.

No-Fault Insurance Coverage

The specifics of what’s covered vary from state to state. A no-fault or PIP insurance claim typically offers compensation for:

  • Medical bills resulting from your accident injuries
  • Income lost (up to a certain dollar limit) because of your inability to work afterward
  • Cost of replacement services when your injuries affect your ability to do daily tasks
  • Burial and funeral costs for wrongful death

One huge distinction between a third-party insurance claim or lawsuit against the at-fault driver and a no-fault PIP claim is that you can recover pain and suffering damages in addition to reimbursement for medical bills and lost income. General damages are not available in a no-fault claim.

Is No-Fault Car Insurance Mandatory?

No-fault car insurance is mandatory in 12 no-fault insurance states. Some states follow allow you to “choose” for a no-fault system or not. Some form of no-fault or PIP insurance is available as an add-on in all states.

Personal Injury Protection (PIP) Coverage

PIP coverage is another name for no-fault car insurance. PIP coverage is required in states that follow a mandatory no-fault system. It’s available as an add-on in every other state. Generally, a PIP claim is filed with your car insurer after an accident and covers your medical expenses and certain other out-of-pocket losses, no matter who caused the crash.

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Adding Personal Injury Protection to Your Policy

Almost every car insurance company in every state offers customers the option of purchasing no-fault or “personal injury protection” coverage. This is generally offered on top of your more traditional liability-based coverage.

In several states, insurance companies must offer no-fault or personal injury protection coverage to customers who are purchasing a car insurance policy. The customer is free to decline these optional coverages.

Assistance After a Car Accident

If you’re involved in a car accident in a no-fault state, especially if the crash resulted in serious injuries or 50,000$ worth of damage or more, you might want to discuss your situation with a lawyer and get a full understanding of your options.

If you’re injured in a car accident and you live in a no-fault car insurance state, you’ll likely make an injury claim with your own car insurance company regardless of who caused the crash. No-fault car insurance can lead to a streamlined claim process and quicker payment, but pain and suffering and other non-economic effects of the accident aren’t compensated.

A car accident lawyer can help advocate for you, gather evidence that supports your claim, negotiate on your behalf, and litigate your claim in court if necessary. Many lawyers offer no-obligation free consultations to discuss your options.

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