If you are in a car accident, you may have heard something about a ‘no fault accident’ or ‘no fault insurance.’ What does this mean?

Approximately 12 states currently have what is called a ‘no fault’ system of various sorts. These states include FL, HI, KS, KY, MA, MI, MN, NJ, NY, NK, PA and UT.

No fault insurance means that your own auto insurance company will pay for some or all your damages, including property damage, medical bills and lost earnings, up to a certain amount that varies by state. Even if you were not at fault for the accident, no fault means your own insurance will cover your damages, but again, only up to a certain amount.

Every state with no fault has different rules. Some require your own insurance to pay up only to $3000 or $5000; you then could make a claim or file a lawsuit against the other party for any additional damages. Some states, such as KY and PA, give you the choice to opt out of the no fault system when you buy auto insurance.

A no fault insurance claim may also be called a personal injury protection or PIP claim. This is where you make a claim with your own car insurer for payment of your medical bills, lost wages and other out of pocket damages after an auto accident. Note that you cannot make a pain and suffering claim against your own insurance; if you wish to do that, you may go outside the no fault system and file the claim or lawsuit against the other driver.

If you are in a no-fault state, it is a smart idea to carry more than the minimum level of insurance. If you are in a car accident with serious injuries, even if it is not your fault, you could have a large medical bill and lost earnings that your own insurance may not cover all of because you did not purchase enough insurance. Yes, you can file suit for the rest, but this takes weeks and months, while getting benefits from your own insurance policy is generally much faster.

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