In most states, if you or your passengers are injured in a car accident, an insurance claim for economic losses against the driver responsible can usually be made against their liability insurance provider. However, certain states utilize what’s known as “no-fault” or “personal injury protection” systems instead.
No-fault states allow drivers to file claims directly with their own insurer without being restricted from suing others, which allows for an easier filing process and may reduce legal expenses for both parties involved. This article will explore how no-fault car insurance works in these states as well as which coverages are mandated.
Personal Injury Protection (PIP) Coverage
Personal Injury Protection (PIP), otherwise known as Personal Auto Liability Coverage in New York is designed to cover medical costs and any lost income for those involved in an auto accident – regardless of who caused it. While PIP coverage is optional in New York, its presence should still be strongly considered.
New York requires its drivers to carry certain amounts of property damage liability and bodily injury liability coverage under its no-fault auto insurance system, to cover damages to third parties in an accident in which you were responsible. Such policies could cover costs associated with legal liabilities should you be found at fault in an incident.
Though no-fault systems offer many advantages, some drawbacks do exist. Some examples include:
Property Damage Coverage
New York is a no-fault state, yet drivers must still carry property damage liability coverage to cover repairs to both their vehicle and any others involved in an accident, up to your policy limit.
Goal of this coverage is to reimburse drivers for economic losses (e.g. medical expenses and lost wages) caused by an accident; however, this type of policy doesn’t address non-economic damages like pain and suffering.
Some states have implemented modified no-fault systems where drivers may sue negligent drivers for non-economic damages if their case meets a tort threshold, whether this means death or significant disfigurement or dollar amounts such as medical bills. New Jersey and Pennsylvania both employ verbal thresholds while Kentucky uses monetary ones.
Uninsured/Underinsured Motorist Coverage
Some states offer uninsured/underinsured motorist coverage (also referred to as PIP), which helps pay for medical expenses and losses caused by drivers without enough liability insurance. It can often be purchased as an add-on policy and should always be included as part of your overall policy.
PIP insurance in New York covers reasonable and necessary medical expenses up to its policy limits, including lost income replacement and funeral costs if anyone involved dies as a result of an accident covered by PIP coverage. PIP is primary to your health insurance, allowing you to file claims against parties responsible if an injury meets a threshold threshold.
Florida, Michigan, New Jersey and Pennsylvania all provide for pure no-fault laws with verbal thresholds to limit lawsuits for noneconomic injuries like pain and suffering to only serious cases as defined by law; while others provide for monetary thresholds preventing lawsuits unless your medical bills surpass certain dollar amounts.
Medical Payments Coverage
Medical payments coverage typically forms part of a no-fault policy and covers your and any passengers’ medical costs following an accident, regardless of who was at fault. It may even cover some lost wages.
In no-fault states, your insurer pays all economic damages up to their policy limit; any non-economic claims such as pain and suffering require meeting an established verbal or descriptive threshold; examples could include broken bones, severed limbs or permanent disfigurement as triggering events.
Many states, including New York, utilize a hybrid no-fault system where drivers may choose between traditional tort rights or pure no-fault coverage. Many insurers offer no-fault coverage as an add-on policy and it’s essential that drivers review their individual policy to know their choices prior to an accident occurring; always ensure your car insurance provider’s details appear on any police accident reports that pertain to you!