What is the Difference Between Fault and No Fault Car Insurance?

When looking for car insurance, you may see terms such as “at fault” and “no fault” car insurance thrown around. Knowing the definition of each types of car insurance and what your state dictates can help you avoid confusion and complications if you ever have to file a claim on your car insurance policy. 

At Fault States 

Most states in the U.S. operate on a type of fault system when it comes to auto insurance. Virginia is one of these states. 

For example, say an accident occurs involving two vehicles. One vehicle was struck by the other, which ran a red light. In this case, the driver who ran the red light is likely considered at fault for the accident. This means that, in a fault state, they are responsible for providing compensation for all damages and injuries not only that they suffer, but that the other victims involved suffer. In this case, the at fault driver would have to file a claim with their insurer for the damages to their vehicle as well as the other driver’s vehicle, along with any injuries involved. 

Many fault states work on a percentage system, which calculates fault based on a percentage. If you are declared 80% at fault, for example, you will have to cover 80% of the damages while the other driver covers the remaining 20%. 

Be sure to check your state’s fault laws when it comes to car accidents to make sure you are being treated fairly and understand why fault is dictated the way it is. 

No Fault States 

On the other side of car accidents, some states have what is known as “no fault car insurance.” Unlike fault states, fault is not taken into heavy consideration when it comes to who should file a claim. New York is one of these such states. 

In a no fault state, each driver is responsible for filing a claim with their own auto insurance policy in order to receive compensation, regardless of who caused the accident. This is why most no fault states require personal injury protection. Personal injury protection provides compensation for medical bills incurred in an accident, regardless of who is at fault. This guarantees that every driver and passenger will receive compensation for medical attention they need after an accident, even if one driver is technically at fault.