No-Fault vs. At Fault Insurance

No-Fault vs. At Fault Insurance

Each state has its own laws that regulate car insurance. The significance of whether a state has no-fault or at-fault insurance policies comes into play when there has been a car accident. 

If you’re in a no-fault state and have been injured in a car accident, you can’t go after the other party to recover damages for medical expenses. Instead, you get paid by your insurance company. In a car accident in an at-fault state, you can seek damages from the party responsible for the accident. 

No-Fault Insurance Explained

No-Fault Insurance Explained

Generally speaking, no-fault insurance means your insurance company has to pay for your losses from an accident up to the policy limit, whether you caused the accident or not. The goal of this type of system is to lower the costs of car insurance by decreasing the number of cases that go to court. This system makes it easier for the parties who didn’t cause the accident to recover compensation. 

Personal Injury Protection (PIP)

No-fault states require drivers by law to buy personal injury protection (PIP) coverage, which will cover the medical expenses of each car involved in the accident and any passengers. The hope is that in most of these cases, the court system will not be involved.

Each party to the accident will get money for medical expenses and lost wages up to a certain amount. Depending on the state, you might have to get as much coverage as you can from your health insurance policy before the car insurance policy will pay the rest. 

To bring the process to life, imagine you are hit by another car in a no-fault state. You were hurt and your car was damaged. You would file a claim with the other driver’s insurance company for the damage to your car. You would then use your own PIP coverage to pay for your medical bills. 

Do You Ever Go to Court in a No-Fault State?

You can initiate a lawsuit against the at-fault driver in a no-fault state under certain circumstances. You can typically sue for severe injuries and/or if your damages exceed your policy limits. A lawsuit will allow you to recover all of your medical expenses and lost income. It will also allow you to recover pain and suffering damages, which are not typically available with no-fault insurance.

At-Fault Insurance

With at-fault insurance, the system is based on tort liability. This means the party that caused the accident pays all the bills. The bills can include medical expenses, damage to the cars, and other property that was damaged

If you are injured in an accident that wasn’t your fault, you would file a claim with the liable driver’s insurance company. The insurer would process the claim and accept or deny liability based on the facts of your claim.

If you aren’t satisfied with the amount of money you received from the insurance company, you can file a lawsuit against them to try and recover greater damages. Unlike in no-fault states, there are no limitations on lawsuits in at-fault states.

In an at-fault state, the claims process is similar to the no-fault state except there is more interaction with and reliance upon the at-fault driver’s insurance company. 

In a few at-fault states, you can buy additional insurance that would provide for the same type of PIP protection that is available in no-fault states. This creates a sort of hybrid of the two systems, because insurance companies cover the injured party without having to assess whether they were at fault. But, they could still end up in court, either as a plaintiff or a defendant in a case seeking compensation for injuries and pain and suffering.

What’s the Claims Process Like?

A typical claims process includes the following steps:

  1. Report the accident to your insurance company and include specifics about your injuries.
  2. Report the accident to the other driver’s insurance company. Details are important, but be careful not to admit fault. It’s the job of that insurance company to figure out what exactly happened. 
  3. Gather documents that can help you prove your injuries.Things like bills from doctor’s visits. A police report is really helpful as well in helping figure out who damaged whose car. 
  4. Show evidence of the details of the accident and your injuries. The more information they have the better.
  5. The insurer will decide to accept your claim, offer a reduced payout, or deny your claim.

A personal injury lawyer can guide you through the claims process.

Texas is an At-Fault State—A Houston Personal Injury Lawyer Can Help 

If you’ve been in a car accident in Houston, contacting an experienced personal injury lawyer early on is the best course of action. They will help you through the claims process and make sure you get the best result possible.