A “no-fault insurance”, also known as a personal injury protection (PIP) insurance, is a car insurance coverage that pays some or all you and your passenger’s medical bills after being injured in a car accident regardless of who is at fault for the accident. It is required in “no-fault states,” ones that follow a “no-fault” insurance system. The system opposite to this is called a fault or tort system, where the party at fault for the accident must be first established before the insurance company pays for damages.
Currently, there 16 states that adopt such system, which include New York, Massachusetts, New Jersey, Utah, Hawaii, Kansas, among others.
No-fault insurance claims cover medical bills and rehabilitation, lost wages, necessary and reasonable expenses resulting from the accident such as household help or child care, and funeral expenses. However, the amount PIP will pay is subject to the coverage limits you selected and to state laws. On the other hand, vehicular and property damages are not covered by no-fault insurance.
One key feature of the no-fault system is that a person is barred by law from making a claim for non-economic damages, such as pain and suffering, with his or her own insurance coverage unless his or her medical bills reached a certain amount or your injury is considered serious enough. In New York, for instance, you can only file a lawsuit against the person responsible for your injury if your injury is considered by the Insurance Law as a “serious injury.”
If you have been involved in an accident in a no-fault state, it is best to consult with a car accident lawyer who will guide you through the claims process.