No-Fault provides prompt reimbursement for economic losses. Economic losses are medical expenses, lost wages or earnings, funeral expenses, household services, and “other reasonable and necessary expenses,” such as transportation to doctors.
No-Fault benefits are available to the driver, passengers, and/or pedestrians injured by a car because of the car’s “use or operation,” no matter who was at fault. That’s why it’s called No-Fault.
No-Fault benefits are available up to the limit of the amount you purchased until that amount is completely paid out or your No-Fault benefits are denied for another reason.
For instance, No-Fault insurance companies are entitled to have a doctor they choose to examine you to see if they should pay for further medical treatment. No-Fault benefits can be denied by the No-Fault doctor at a physical exam called an IME or Independent Examination. However, these exams are not independent. But you can ask your personal injury lawyer to have someone protect you at your IME.
Is No-Fault the Same As Personal Injury Protection (PIP)?
No-Fault is the state law, and Personal Injury Protection (PIP) is the insurance coverage sold pursuant to the state law.
No-Fault and Personal Injury Protection (PIP) are used interchangeably as two names for the same type of automobile insurance coverage.
People who are injured by a car accident in a No-Fault state will have their medical bills and lost wages paid by the PIP coverage of their own insurance company.
What is the Difference Between No-Fault and Personal Injury Protection (PIP)?
There is no difference in the meaning of how the terms are used. The terms No-Fault and Personal Injury Protection (PIP) are used synonymously.
What Doesn’t No-Fault Cover?
- No-Fault does not provide coverage for injury to someone in another car
- No-Fault does not provide coverage for damage to your car or property
- No-Fault does not provide coverage for anyone else’s car or property
- No-Fault also does not provide coverage for non-economic damages such as “pain and suffering.”
What No-Fault Doesn’t Mean
No-Fault doesn’t mean that you’re not at fault for a car accident because you’re in a No-Fault state. This is a common misconception. But if you were negligent, then you are at fault or partially at fault for causing the car accident.
Which No-Fault Insurance Company Has to Pay for a Car Accident?
Regardless of who is at fault for an auto accident, the No-Fault insurance company for the car you occupied at the time of the car accident will pay the PIP benefits for your medical bills and lost wages.
Pedestrians hit by a car will receive PIP coverage from the car that struck the pedestrian.
PIP coverage doesn’t take into account who is at fault in an accident.
How Does No-Fault Insurance Coverage Work?
Most No-Fault states are very similar, but since each state enacted its own No-Fault law, there are differences between No-Fault states.
No-Fault insurance coverage is a mandatory part of an insurance policy insuring a car registered in New York State. The No-Fault insurance company provides coverage to you as the insured owner or lessee of a car and to all relatives living in your household, invited passengers, and pedestrians struck by your car.
Cars registered out of state which drive into New York State automatically come under the No-Fault law as soon as they enter the state. That means if an out-of-state car from a state that does not have No-Fault comes into New York State and has a car accident, that car will automatically have No-Fault coverage because of the New York State No-Fault law.
No-Fault also provides coverage to a New York State insured for incidents that occur in other states anywhere within the United States, its territories and possessions, or Canada. Invited passengers who are injured outside of New York State are covered if they are not covered under another auto insurance policy in New York State.
Basic New York State No-Fault coverage provides minimum coverage of up to $50,000 per person, but additional coverage can be purchased.
Does No-Fault Cover motorcycles?
Motorcyclists and motorcycle passengers are not covered by No-Fault. However, No-Fault does provide coverage to a pedestrian struck by a motorcycle. Since motorcyclists do not have No-Fault coverage, it is very important to have health insurance or to purchase separate medical coverage.
Because No-Fault does not provide coverage to the occupants of a motorcycle, there is a potential benefit when an injured motorcycle occupant seeks to file a lawsuit for “pain and suffering.” When an injured person does not have No-Fault coverage, the injured person does not have to have a serious injury to file a personal injury lawsuit for pain and suffering.
What States Have No-Fault Insurance
These are the different types or flavors of No-Fault states.
States That Require No-Fault Insurance
- Florida
- Hawaii
- Kansas
- Kentucky — drivers have to choose full tort or limited tort
- Massachusetts
- Michigan
- Minnesota
- New Jersey — drivers have to choose full tort or limited tort
- New York
- North Dakota
- Pennsylvania — drivers have to choose full tort or limited tort
- Utah
Full tort coverage gives you an unrestricted right to sue the at-fault party in a car accident for pain and suffering
Limited tort coverage limits your right to sue the at-fault party in a car accident for pain and suffering to “serious” injuries. Determining what a “serious” injury is, is both complicated and defined by both state statutes and state court decisions. It is not what you or your doctor considers to be serious. We called it a legally defined serious injury.
At-Fault States (Not No-Fault) That Require You to Buy Personal Injury Protection
- Arkansas
- Delaware
- Maryland
- Oregon
- Texas
States Where No-Fault Insurance is Optional
- South Dakota
- Virginia
- Washington
- Washington, D.C.
How to Protect Yourself From Medical Bills When You Have N0-Fault Coverage
If you have a car accident in a No-Fault state, you must file an application for N0-Fault coverage after your car accident, even if you bought N0-Fault coverage.
Call a car accident lawyer immediately because you have a very short amount of time to file an application for N0-Fault coverage and benefits. For instance, in New York, you only have 30 days after your car accident to file an application for N0-Fault coverage. Other states may allow a little more time.
When you go to a medical office, you will likely be asked to sign a form allowing the doctor to bill your no-fault insurance company directly. This may look like a legal form and is called an assignment. You should sign it! If you do, the medical facility cannot bill you if they are not paid the full amount of their bill. If you do not sign an assignment, the medical facility can bill you for the full amount of their bill if no-fault insurance doesn’t pay enough. See Should You Sign an Assignment Form at Your Doctor’s Office?