Understanding The Difference Between No-fault and At-Fault Insurance
- Mateo
- Mar 25
- 4 min read
Updated: 1 day ago
Hopefully, you are never in a car accident. Unfortunately, statistics are not in your favor. Your chances of being involved in a vehicle collision are greater than winning the lottery. If you find yourself in an auto wreck, whether it is your fault or the other driver’s, figuring out who’s insurance pays for what can be complicated.
The confusion is often the result of state laws. Some states have no-fault laws while others place the blame on a particular driver. Understanding the differences between no-fault vs at-fault insurance is key to recovering compensation.
At-Fault vs. No-Fault States
A common misconception regarding vehicle accidents is drivers contact their respective insurance companies and file a claim. While this is the standard way to handle a car wreck, state laws also come into play. Currently, there are 28 states with no-fault insurance laws on the books. The remaining 22 states, plus the District of Columbia follow at-fault laws.
So, what does this mean for drivers? If the vehicle collision occurs in a no-fault state, everyone involved contacts their insurance agent. When the wreck happens in an at-fault state, the driver deemed responsible for the accident pays for everything. This includes both property damages and injuries that occur or are exacerbated by the accident.
A Closer Look at Car Accidents in No-Fault States
Getting into an accident in a no-fault state does not mean both drivers get off scot free. Traffic tickets will still be issued. The at-fault driver is also responsible for covering any property damages. This means paying to repair the other driver’s vehicle through insurance or out-of-pocket. The only thing the at-fault driver is not responsible for covering is any injuries sustained in the accident.
Both drivers will use their insurance’s medical or PIP (personal injury protection) to cover any medical care. If the non-fault driver uses their insurance to pay for vehicle repairs, the at-fault driver is responsible for reimbursement. The at-fault driver can use their liability coverage or pay for the repairs out-of-pocket.
A Closer Look at Car Accidents in At-Fault States
At-fault or tort state accident laws are often a little easier to understand. Basically, the at-fault driver is responsible for covering property damages and medical care. The at-fault driver can cover the expenses using insurance or by paying the non-fault driver cash. A quick tip, do not try to give the non-fault driver a personal check. Stick with either insurance, cash, or a cashier’s check.
Your driver’s insurance policy has two parts, property damage and injury coverage. Your insurance will only pay up to your coverage amount. You are responsible for any remaining balances. For example, your property damage coverage goes up to $12,000 but repair costs are $13,000. You are responsible for paying the additional $1,000 out of your pocket.
If you, as the at-fault driver, also carry PIP insurance. This type of insurance will cover your medical expenses up to the preset amount. PIP insurance may also cover any injuries your passengers sustained as a result of the car wreck.
What Happens When You Are the Non-Fault Driver?
State laws determine what happens when you are the non-fault driver in a car accident. This is when it can get a little confusing.
As the not-at-fault driver, in a no-fault state, your PIP insurance is responsible for covering your injuries and those of your passengers. Remember, PIP insurance only covers up to the preset amount, so you may still be paying for medical care. Occasionally, PIP insurance will also cover any lost wages due to injury recovery times.
When it comes to repairing your damaged vehicle, the other driver’s insurance is responsible for covering these costs. So, what happens if you are the no-fault driver in an at-fault state? In most cases, the at-fault driver’s insurance is responsible for your medical costs and covers all vehicle repair costs.
You can still carry PIP insurance in at-fault states. Often, the PIP insurance kicks in to cover medical expenses and recoups the costs from the other driver’s insurance carrier. Sometimes, your PIP insurance will settle your medical bills faster than the at-fault driver’s insurance.
How Do States Determine Which Driver is At Fault?
While all accidents are unique, the process used to determine which driver caused the accident is basically the same. Law enforcement personnel will take statements from both drivers, along with any witnesses. Insurance adjusters are also responsible for determining accident fault.
Witnesses can be passing motorists or passengers in one or both involved vehicles. Some vehicles have dash cams and police will want to review the footage. The accident may also occur in view of a traffic camera. This can also provide additional information about the accident’s cause.
The police will analyze the scene and record their findings in their accident report. Both drivers will receive a copy of the report from their respective insurance companies. Your insurer will want to review the accident report before approving any payouts.
Don’t be surprised if you are contacted by an insurance adjuster. This is common practice after a vehicle accident. Chances are, you will answer questions from your insurance provider and that of the at-fault driver. After reviewing all of the information, the insurance companies will begin settling claims.
What If Both Drivers are Found Negligent?
Sometimes, both drivers are found to be negligent. When this happens, everyone’s insurance is involved. To determine the amounts paid out, insurance companies typically look to see which driver can be considered the most at fault.
State laws will also determine the type of negligence. This can fall into one of three categories, contributory, comparative, or modified comparative. The category your accident falls into will determine the amount you owe in damages or receive.
Talk To an Attorney About No-Fault and At-Fault Car Accident Claims
Trying to navigate the confusing laws and regulations surrounding no-fault and at-fault car accidents can leave you feeling confused and frustrated. To ensure you are fairly compensated or do not pay more than you should, it is also best to talk to an accident attorney. This can mean the difference between paying out-of-pocket or receiving a check.