Out of the 50 US states, only 13 have adopted “No fault” auto insurance. A foundation based on fault is used by the other states. This establishes how insurance companies will settle their claims. The decision would be based on defining each person’s degree of fault.

Coming up with this information can be expensive and time consuming. It also brings more cases into congested courtrooms. No fault is utilized in Colorado, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.

With no-fault, your insurance company pays no matter who is at fault. It will cover to the policy limit. You would sacrifice any privileges to bring a claim to any other drivers that may have been caught up in the accident.

Property damage and medical costs are also paid for regardless of fault. This type of insurance is used to eliminate lawsuits from being brought into court. This is done by placing limits on pain and suffering while offering limited compensation for any loss.

There are actually two different types of no-fault insurance. Pure no fault will pay for medical and wage loss up to your policy limit. However, the other costs you would not be allowed to sue for. This system is not in use across the US. It is, in essence, superseded.

The modified no fault is used in the states with no- fault. In some cases you can still bring forth a claim but your damages and lost wages are paid for. If damages surpass a specific amount then it would be possible to recoup losses. This limits the number of cases to go before the courts to serious injuries only.

There are benefits to using this system. Claims are paid out much faster, no lawyers are involved, and this results in offering lower insurance premiums. The courts benefit by a reduction in court cases.

Because all drivers are treated equally, many would prefer to use a different system. Pain and suffering not being compensated for is a claim that some make. There are pros and cons with either plan.