No-Fault

What Does No-Fault Mean?

No-fault refers to an auto insurance policy that provides compensation to the insured regardless of who is responsible for the accident. By accepting the claim, the insured is generally prohibited from suing a third party for injuries related to the accident.

Insuranceopedia Explains No-Fault

The no-fault policy was introduced as a solution to the lengthy lawsuits often involved in vehicular accidents. Thirteen states in the U.S. adopted no-fault insurance to avoid long and costly court procedures and to expedite the payment of medical expenses for injuries by quickly awarding insurance money.

However, the insured is prohibited from taking legal action against another party (typically another motorist) involved in the accident. This restriction can be lifted if the insurance policy does not cover the medical bills or if the insured suffers a serious, life-altering injury or death.