Notice: Undefined offset: 1 in /Data/www/remmont.com/htdocs/wp-content/plugins/wpa-seo-auto-linker/wpa-seo-auto-linker.php on line 137
What is No Fault Insurance and How Does a Claim Work?
About a dozen states follow what’s called a “no-fault” car insurance system (District of Columbia, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah). No-fault insurance means that your own automobile insurer will pay some or all of your medical bills and lost earnings if you get into a car accident, regardless of who was at fault for the crash. A no-fault claim is typically made through the “personal injury protection” or “PIP” provisions of a car insurance policy (this kind of coverage is mandatory in no-fault states).
Every no-fault state’s rules are different. A few are even so-called “choice” no-fault states (Kentucky, New Jersey, and Pennsylvania), where vehicle owners essentially have the choice to “opt out” of the no-fault system when purchasing a car insurance policy.
What is A No-Fault Insurance Claim?
A no-fault insurance claim, sometimes called a Personal Injury Protection claim (or PIP claim), is one you make with your own automobile insurer for payment of medical bills, lost earnings, and certain other out-of pocket damages after a car accident.
A key component of the no-fault scheme is that you are never permitted to make a claim for pain and suffering with your own car insurance coverage, and you can only pursue this kind of recovery against the at-fault driver if your medical bills reach a certain level — or your injury is deemed sufficiently serious — so that you’re permitted to step outside of the no-fault rules. For example, your state’s no-fault law might prohibit a personal injury claim against the at-fault driver unless your medical bills exceed $3,000 or you suffer a broken bone. This feature of no-fault laws is a legislative attempt to streamline car accident cases, especially smaller claims.
Let’s take an example. Let’s say that you got into a car accident in New York. The other driver was at fault, you broke your right leg in the accident, and you incurred $7,500 in medical bills. In order to step outside the no-fault system and bring a claim directly against the at-fault driver in New York, your claim must meet the “serious injury” threshold in place under state law. That means, as a result of the car accident, you’ve experienced any of the following:
- significant disfigurement
- bone fracture
- permanent limitation of use of body organ or member
- significant limitation of use of body function or system, or
- substantially full disability for 90 days.
Since your injuries qualify under this definition (because of your broken leg), you can file a third-party liability claim or personal injury lawsuit directly against the at-fault driver, demanding compensation for all categories of losses, including pain and suffering (which, again, isn’t available in a no-fault claim). But if you suffered only minor injuries that don’t qualify as “serious” under New York’s threshold, you’re limited to a claim under your own PIP coverage.
You Must Cooperate With Your Insurer in a No Fault Claim
With a no-fault claim, the usual rules for dealing with an insurance company in a personal injury case usually should be disregarded. For example, in most cases, you do not want to give a recorded statement to the other side’s insurance company. But, in a no-fault claim, state law generally requires you to cooperate with your insurer. Your policy may require you to give your insurer a recorded statement, and may require you to attend a medical examination with a physician selected by the insurance company. If you fail to cooperate with the process, your insurance company may have grounds to deny the claim.