What Is No-Fault Insurance?

No-fault insurance coverage covers an individual driver’s injuries and damages after an accident rather than waiting for fault to be determined. No-fault car insurance is only required in twelve states, and it often includes higher levels of liability and additional coverage, including personal injury protection and uninsured motorist insurance.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Jul 16, 2021

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Don’t get the wrong idea about no-fault insurance coverage. Some people believe that no-fault insurance will cover any damage incurred during an accident, or that no-fault means that your insurance is guaranteed to pay for the covered driver, which would limit insurance company claims to only the people listed on the policy.

Even though there is some truth to these statements, they are not completely true, either.

What is No-Fault Insurance Coverage?

When someone has been in an accident and been injured, the last thing they want, or need, to do is to spend time concerned about the details of insurance claims like who was at fault, who is responsible for covering damages, etc. These folks need to get the treatment required by their circumstances.

That is what no-fault auto insurance is all about, making the claim process operates at a quicker pace, so injured people don’t have to be concerned with those things. No-fault insurance gives law enforcement and your insurance company an opportunity to investigate the accident and
get some facts about it such as who is responsible for the accident. While this investigation is going on, no-fault policies will cover preliminary injuries and any related costs.

What Does No-Fault Auto Insurance Cover?

No-fault coverage does not imply that there is no one who is ever deemed as being responsible for the accident, it simply means that at the time of the accident, who is at fault is not the priority. The priority at this time is in getting treatment for you and/or your passengers, as both are covered by no-fault policies. There will be an investigation to determine who is at fault.
Once the party responsible is determined, they may be liable for the costs. The insurance companies involved will then come to a settlement. This is not the exact way things transpire in every state, as each state differs in the details.

What is Exempt From No-Fault Coverage?

The main thrust of no-fault coverage is in covering physical injuries, thereby preventing gaps in medical coverage related to disputations about who is responsible. Keep this in mind, as no-fault coverage does not ordinarily cover property damage associated with an accident. There are other types of policies for this type of coverage.

No-Fault Auto Insurance and Liability

The minute it is determined that medical attention is required, no-fault coverage goes into effect. In cases where more than one car is involved in an accident, the individual insurance companies will provide coverage for the injuries sustained. After a responsible party has been determined by the insurance companies, the insurance companies for the victims who were not at fault will attempt to claim reimbursement for the coverage that the provided at the time of the incident from the insurance company of the at fault driver.

No-Fault Insurance States

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