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How Does a Claim for No-Fault Auto Insurance Work?

No matter who was at fault for the collision, if you are hurt in a car accident and live in a no-fault insurance state, you will probably file an injury claim with your own insurance provider. What you need to know right away is as follows:

No-fault auto insurance can speed up the claims process and payment, but “pain and suffering” and other non-economic consequences of the collision are not covered. If your injuries meet the statutory threshold in a state with no-fault auto insurance, you can opt-out of the no-fault system. Around a dozen states require some kind of no-fault auto insurance, but it can be added to your auto insurance policy in every state.

What Does No-Fault Auto Insurance Entail?

No-fault insurance means that regardless of who was at fault for the collision, your own auto insurance policy will cover some or all of your out-of-pocket expenses or economic losses if you are injured in a car accident. A no-fault claim is made through a car insurance policy’s “personal injury protection” or “PIP” provisions (this kind of coverage is mandatory in no-fault states.

What Exactly Is a “No-Fault State”?

The term “no-fault state” is most frequently used to describe a state whose laws mandate that the default auto insurance system be one in which injured drivers turn first (and frequently exclusively) to their own auto insurance coverage to recover compensation for specific losses following an accident.

The laws in each no-fault state are unique. In some states, purchasing no-fault insurance is required, and for injured drivers, passengers, and others, filing a claim under the no-fault system is their first (and occasionally their only) choice. Vehicle owners essentially have the option to “opt out” of the no-fault system and choose liability-based coverage in the few “choice” no-fault states, either when buying a car insurance policy or when filing an injury claim following an accident.

What Is Insurance for “Personal Injury Protection” (PIP)?

As we mentioned above, personal injury protection, or “PIP” coverage, is another name for no-fault auto insurance. PIP can be added to any auto insurance policy in any state, but it is only required in so-called “no-fault states.” It doesn’t matter who caused your car accident when you’re filing a claim under PIP coverage, whether it’s required or optional in your state.

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