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What Is a No-Fault Accident?: What it Means and How to Protect Yourself

Tarun Sridharan Legal Editor & Attorney Contributor Read Time: 9 minutes

What Is a No-Fault Accident?: What it Means and How to Protect Yourself

If you’ve been involved in a car accident, then you might have heard that your accident is covered by the no-fault system. This can be confusing for many people. After all, we mostly understand that an accident can lead to a lawsuit against the defendant, but what is a no-fault accident, and what does it entail? In a no-fault accident, who pays?

No-fault accidents aren’t as complicated or confusing as they might seem at first glance. In fact, they provide foundational compensation in almost all cases! That being said, we do encourage you to contact us at 1-800-THE-LAW2 for further guidance. We’ll connect you to an attorney in our network for a free consultation to evaluate your claims and advise you on next steps.

If you’re still curious about the intricacies of no-fault accidents, continue reading to learn more.

What is a no-fault accident?

Following the average car accident, an insurance company must determine which driver was “at fault.” The insurance company of the individual determined to be at fault is responsible for covering the damages.

We consider an accident “no-fault” when the compensation does not depend on the determination of fault.

In no-fault accidents, your personal insurance provider will be responsible for paying for any hospital bills, medical expenses, or fees associated with post-accident rehabilitation. Drivers will receive compensation for associated medical expenses regardless of who caused the accident. Benefits might also cover lost wages as a result of the accident, funeral expenses, and certain replacement services.

You are most likely to experience a no-fault scenario in one of the ten no-fault states.

What is a no-fault state?

In the United States, a small minority of states impose a system known as “no-fault.” In accordance with this system, if you get into an accident, you’ll have to turn to your own insurance policy for compensation.

Which states impose the mandatory no-fault system?

A minority of states follow the mandatory no-fault system. In these states, you must turn to your own car insurance coverage for a recovery, no matter the fault of the driver. The ten current no-fault states are as follows:

  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • New York
  • North Dakota
  • Utah

Beyond that, only three jurisdictions employ a hybrid system. In the hybrid system, you can choose between the different options, no-fault included. These jurisdictions are Washington, DC, New Jersey, and Pennsylvania.

In scenarios where there’s a serious injury, the cost of damages will likely meet a minimum threshold. This will allow you to move forward with a traditional car accident lawsuit and sue the defendant for damages. We’ll discuss this further below. All to say, there is almost always a way to get the compensation you really deserve following an accident.

Circumstances vary, however, so it’s worth talking to an attorney about what steps make the most sense for you.

Who pays for car damage in a no-fault state?

It is crucial to note that, in no-fault scenarios, benefits do not cover the damage to property. In such cases, the driver deemed technically at fault will be responsible for the damages.

In designated no-fault states, licensed drivers must carry property damage coverage. If your car or other property is damaged in an accident, you will need to file for compensation through the other driver’s insurance. This is a fairly standard process, and a car accident attorney can easily help.

What is a No-fault Insurance Policy?

No-fault insurance policies are often referred to as personal injury protection or PIP policies. They tend to provide minimal coverage. If you are licensed to drive in a no-fault state, you must have a PIP policy to own and operate an automobile.

If you sustain a less-than-serious injury (i.e., no-fault applies), the minor injury losses will be fully covered by your PIP benefits. In this way, no-fault protects you, so you won’t have to pay minor medical bills out of pocket.

A woman makes a telephone call after an accident

What happens in a no-fault accident if you have sustained serious injuries?

In a minor “not at fault” collision claim, you can recover most of your losses through your insurance policy. Minor injuries may require a little more effort. Luckily, in No Fault accidents, you have pathways toward achieving the compensation you deserve.

In such instances, consider working with an attorney for proper assistance. They can advise you on how to proceed with a lawsuit.

Is there any way to bring a car accident lawsuit in a no-fault state?

Yes, it’s possible under certain circumstances, and in fact, it’s advised in many cases. If you’re involved in a no-fault car accident, then, in order to bring a lawsuit, you’ll have to qualify for one of the exceptions.

There are two primary exceptions:

  1. The accident resulted in a “serious injury” as per the legal threshold or
  2. The accident led to medical expenses that calculate above the legal threshold.

We’ll briefly clarify what these two exceptions entail below.

What qualifies as a serious injury?

Even in no-fault states, those who suffer serious injuries are fully entitled to sue the defendant-driver and obtain compensation.

Definitions of seriousness vary from state to state, but as a general rule, a serious injury involves significant or permanent disruptions to bodily functions, disfigurement, and other similarly severe damage. Disabilities that last as short as three months often qualify as serious. In most cases, you are free to pursue a lawsuit against the defendant if the medical expenses (linked to the accident) are greater than a specified threshold amount. This amount can be as little as $3,000 in some states, so the threshold is quite low.

In many car accident scenarios, the exception will apply, giving you the freedom to pursue a lawsuit.

In the state of New York, for example, a fracture injury is enough to qualify as “serious” for the purpose of a no-fault exception. In these cases, you can and should sue the defendant for excess damages, and will usually be successful.

What should you do if you get into a car accident in a no-fault state?

If you get into a car accident in one of the no-fault insurance states, there are a number of steps that you should take. Some of these steps are universal to all car accident scenarios, while others are specific to the no-fault dynamic. When considering what to do, be aware that your circumstances should determine your choices.

The general steps to follow are as follows:

  • Secure emergency medical attention
  • If not severely injured, jot down eyewitness contact information
  • Avoid extensive discussion with the driver who hit you
  • Avoid discussion with the insurance companies until you have hired an attorney
  • Cooperate with law enforcement, though it’s better if you have an attorney
  • Hire an attorney
  • Evaluate your damages
  • Submit your no-fault insurance claim
  • If your damages are not fully covered by no-fault insurance, explore options for a lawsuit
  • Negotiate a settlement to secure compensation funds
  • If a fair settlement is impossible, move forward with litigation

We understand that it can be overwhelming to deal with. That’s one of the many reasons why it’s worth working with an attorney at an early stage.

Experienced attorneys provide both advocacy and guidance. They will give you clarity on next steps and will work closely with you to ensure that your best interests are protected along the way.

What if you get into an accident while traveling in a no-fault state?

If you are licensed in a state without no-fault benefits, you likely do not have PIP insurance. What happens if you get into an automotive accident in a no-fault state? 

In such cases, the no-fault system still applies. As an insured driver, you have coverage nationwide. As long as you have the legal minimum automotive insurance required by your home state, you can claim no-fault benefits after an out-of-state accident. This should be the case even if your existing insurance policy does not include no-fault benefits.

If you get into an accident while traveling in another country, the situation is more complex. Always consult legal counsel for assistance with complex legal scenarios.

Does a no-fault accident go on your record?

Yes, it will. In a no-fault state, you’ll have to submit a claim for reimbursement with your insurance company to obtain compensation. This claim for reimbursement will go on your driving record, whether or not you were actually at fault for the accident.

Bear in mind that the record for a car insurance claim is not permanent. Depending on the state jurisdiction and the severity of the accident, the claim will go on your record for anywhere from two years to five years or more. If possible, it’s worth talking to an attorney about how the claim will impact your driving record and what sort of consequences you may face as a result.

Contact 1-800-THE-LAW2 for a Free Consultation Today

If you’ve been injured in a car accident, then you may have a right to sue and recover compensation under the law. Pursuing compensation isn’t always straightforward. There are twists and turns and barriers to overcome. Certainly, the insurance companies and your legal opposition aren’t going to pay without some strategic back-and-forth first.

We encourage you to take these important steps towards recovery alongside a trusted attorney.

Contact 1-800-THE-LAW2 to get connected to an experienced car accident attorney in our network. Consultation is free, and there’s no obligation to continue if you decide that it isn’t the right path for you. However, do be aware that all claims have a deadline, so it’s important that you contact us for an attorney as early as possible.

Our offices are open 24 hours a day, 7 days a week, so we can assist you no matter when your accident occurs.

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