Fault vs No Fault Car Insurance
There are two types of car insurance, fault and no fault. The primary difference between the two is whose insurance pays for damages to the vehicles, and how fault in the accident is handled. Which type of car insurance is used in your state is determined by the state department of insurance, and each state only uses one of the two.
Fault insurance is the traditional type of coverage. When an accident occurs, the person who is deemed to be at fault is responsible for insurance claims. If you were not at fault and the other driver did not have insurance, you would be responsible to pay for your own damages and injuries, and could then sue the other driver. The ability to sue the other driver is an option for anyone who feels that they did not get what they deserved.
In no fault states, you file insurance claims with your own insurance company, and then the insurance companies of everyone involved negotiate settlements behind the scenes. There is no question of whether the other person has insurance, because your claim will be paid by your own company, insurance and they will seek restitution from the responsible parties. Under a no fault rule, you are only able to file lawsuits against the other parties under certain circumstances, such as the loss of life.
No fault is a little more expensive than traditional coverage, but it provides the insured person with more dependable coverage and prevents you from being left without medical care just because someone else is not paying for their own insurance. No fault insurance is also called PIP, or personal injury protection, because it puts the personal welfare of the insured driver first, paying for immediate medical attention and then sorting out the details of who is responsible for the accident later.