Car accidents are the most common reasons behind insurance claims in the USA, but the laws and legal processes for claiming damages and compensation are not the same in every state. The primary difference is between no-fault states and tort liability. Understanding what no-fault means, who it applies to, and how it impacts the claims process can help drivers be better prepared if they are involved in an accident.
What Does No-Fault Mean in Car Accident Law?
In short, no-fault refers to financial liability following car accidents. To be more specific, it means state laws that say all drivers must claim damages from their own car insurance coverage provider- regardless of who was responsible for the crash.
Conversely, tort liability states (sometimes called fault states) allow victims to claim compensation for damages from the other driver's insurance company if the accident was not their fault. In other words:
No-fault states do not place financial liability on the responsible party.
Fault or tort states put the responsibility and liability for damages on the person responsible for the accident.
How Does No-Fault Insurance Work?
Drivers in no-fault states have slightly different insurance requirements than those in fault states. Some states ask for many of the same policies, including basic liability coverage, but with a few extras.
The main difference is Personal Injury Protection. This insurance pays for medical bills, lost wages, and other out-of-pocket expenses in a no-fault insurance claim. Drivers in these states must carry Personal Injury Protection as part of their auto insurance. Otherwise, they cannot recover the costs incurred if they are involved in a collision. Drivers should also have some liability insurance in case they cause damage to someone else's property. Some states require this by law, but others do not.
Another important inclusion is uninsured motorist insurance. If a person is involved in a car accident in a no-fault state and the expenses exceed their PIP insurance limit, they may be able to claim from the at-fault driver. When that driver is uninsured, they can rely on this additional policy to pay the excess.
The exact ins and outs of no-fault insurance and car accident laws vary depending on the state. There are three types of no-fault states:
True no-fault (full no-fault laws)
Choice no-fault (the option to choose either a no-fault or tort liability insurance policy)
Add-on states (flexibility to claim from their own insurance or pursue a lawsuit)
Is No Fault Car Insurance Required by Law?
Most states require all drivers to carry car insurance. In true no-fault states, drivers should have additional insurance- including personal injury protection coverage (PIP insurance) and liability coverage. The exact coverage drivers should have depends on their state. Some states a fully no-fault, some are fully tort liability, and others use a combination of laws.
Unfortunately, a worryingly high percentage of American drivers do not have the insurance they are legally required to have. This causes more problems in fault states, as it can make it difficult for accident victims to claim the compensation they are entitled to. Uninsured or underinsured motorist coverage is recommended as an add-on for this reason.
The number of uninsured drivers is generally lower in states with no-fault laws. Without it, drivers face steep bills they would need to pay by themselves, so it makes sense to have the legally required coverage. Schuerger Shunnarah Trial Attorneys can help explain questions such as what does at-fault mean in car accident law?
Can Car Accident Victims Sue the Other Driver in a No-Fault State?
It could still be possible to sue for damages if injured in a car accident in a no-fault state- but only under certain circumstances. The person's own insurance company still pays for vehicle damage and other out-of-pocket costs (provided they have the proper coverage), but an additional lawsuit can be filed for further medical costs. To be eligible, the severity of the injuries or medical expenses must meet one of two thresholds.
Verbal Threshold
The verbal threshold refers to the severity of an injury. It essentially means that the type of injury can be expressed in a term that meets the threshold for the right to sue. An example could be disfigurement- a clear verbal term that applies to several potential injuries that could be sustained in a car accident. There are, however, some complex limitations that a vehicle accident law firm in Indianapolis can help navigate.
On this basis, most minor injuries and even some challenging injuries don't meet the criteria. Here is a list of the verbal threshold terms in no-fault car accident law.
Disfigurement
Significant scarring
Permanent injury
Loss of a fetus
Dismemberment
Death
Monetary Threshold
Alternatively, the medical expenses for the injury must exceed a certain amount before a person can sue the other driver. The exact dollar threshold amount varies between states- and some only follow the verbal threshold rules.
Is Indiana a No-Fault State?
Indiana is not a no-fault state, so these rules do not apply. Instead, car accident victims who did not cause the crash (or are less than 50% responsible according to comparative negligence laws) can claim compensation from the negligent party through a personal injury car accident settlement or lawsuit.
However, an Indiana driver involved in an accident in a no-fault state may not be able to claim from the other driver.
12 states follow no-fault insurance laws. The current no-fault insurance states are:
Florida
Hawaii
Kansas
Kentucky
Massachusetts
Michigan
Minnesota
New Jersey
New York
North Dakota
Pennsylvania
Utah
Some other states and territories have choice no-fault laws or add-on insurance laws, which give people the option to take out tort liability coverage or PIP coverage- or both. There are other options to include in an insurance policy to extend the protections for all potential incidents.
How Can Drivers in No-Fault States Protect Themselves?
The best way to ensure complete protection is to look into the specific laws in each state. If someone lives in a no-fault state, they should take out a policy that protects them from every angle. Schuerger Shunnarah Trial Attorneys also has insight on the average settlement for a car accident while pregnant Indiana.
Indiana drivers who spend time in no-fault states should consider taking out additional coverage in case they are involved in an accident across state lines.
Schuerger Shunnarah Trial Attorneys support car accident victims facing difficult and complex compensation claims. They go to war for Indy drivers to help them recover what is rightfully owed. Arrange a free consultation today to learn more.