Did you know that each year over five million car accidents occur? This high number is the reason why car insurance is so important whenever you’re on the road.
Unfortunately, individual state laws can make it confusing to know what type of insurance to get. Most states can be divided into either no-fault insurance states or at-fault insurance states.
But, what is no-fault insurance? And when do you need it? If you want to learn the answer to this question, and more, then you’re in the right place.
In this guide, we’ll give you a crash course on what to expect from this type of car insurance. Let’s get started!
What Is No-Fault Insurance?
No fault car insurance is a type of policy that requires your insurance coverage to pay your hospital/medical bills, as well as passengers in your car.
The specific amount of coverage is determined by the limits on your policy with any applicable deductibles being subtracted. In some cases, your coverage might also cover things like lost wages and funeral costs in the event of a death.
The goal of this type of insurance is for everyone to have access to medical care regardless of who caused the accident. However, it’s important to note that no-fault insurance only covers things like medical costs.
It does not cover property damage and car repairs from the accident. If your car is damaged, then the at-fault driver will be responsible for paying you back with their property damage liability insurance.
When Do You Need No-Fault Insurance?
In the United States, twelve states use no-fault insurance laws. They include the following:
- Florida
- Hawaii
- Pennsylvania
- Kentucky
- New Jersey
- Massachusetts
- Michigan
- Minnesota
- New York
- North Dakota
- Utah
However, it’s important to note that in Kentucky, Pennsylvania, and New Jersey you can choose to opt out of a no-fault policy if you want. In the other no-fault insurance states, it is mandatory.
What Is at-Fault Insurance?
At-fault, insurance is the opposite of no-fault insurance. In these states, the person responsible for the accident must cover both the medical expenses and property damage after an accident.
States that use these guidelines are also called tort states. If you want to learn more about states with these types of insurance, then you can read more here.
Appreciate Learning About Insurance Types? Keep Exploring
We hope this article helped you answer the question, What is no-fault insurance? If you’re still confused about what type of car insurance you need, then consider calling an insurance provider in your state.
That can give you more information on how your specific state operates. That way, you can stay safe and protected when you’re on the road.
Enjoy this type of informational content? If the answer is yes, then keep exploring to find plenty of topics that are similar to it.
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