No-fault auto insurance is a car insurance coverage that pays for you and your passenger’s medical bills in case you get injured in an auto accident.
This is regardless of who was responsible for the accident.
This type of insurance coverage also goes by the name PIP insurance or personal injury protection.
What does No-fault auto insurance cover?
This kind of insurance assists to cover hospital and medical bills.
After covering such bills after your accident, the insurance can also take care of the following:
- Funeral expenditures
- Essential services like cleaning or child care, which you might be unable to handle due to injuries
- Lost income because of injuries
- Expenditures that exceed health insurance coverage limits
- Health insurance deductibles
What are the coverage limits of no-fault auto insurance?
No-fault auto insurance features a coverage limit.
Basically, this is the maximum amount that an insurer pays for a claim.
In the states where this insurance is functional, state law normally dictates the minimum coverage limits.
Insured folks must but at least the minimum amount of coverage needed by the state.
It’s also possible to buy extra coverage in order to raise your PIP limits.
In some situations, higher limits might be an excellent idea.
If you or those you’re traveling with happen to get injured in the event of an accident, you might have to pay for medical expenses that are over your coverage limits from your pocket.
What doesn’t no-fault auto insurance cover?
The following are some of the things or items that this type of insurance doesn’t cover:
Damage to other folk’s property – If you’re the one responsible for an accident, property damage liability coverage assists to offset the damage caused to another person’s property or car.
Damage to your car – Collision coverage is handy when it comes to repairing your car if it gets damaged in a crash together with another car.
Medical expenditures above your coverage limits – Lost wages or medical bills that exceed your insurance coverage limit won’t be reimbursed.
However, in some states, there’s an exception.
You might file a personal-injury lawsuit against another driver if he or she is responsible for hurting you or someone in your car seriously or if the medical ills exceed a particular dollar limit.
How does the no-fault auto insurance work?
In the states that allow this type of insurance, if you happen to get injured in an accident; PIP might help to settle for any associated costs regardless of the person who is at fault.
However, it’s strictly up to the limits, which you selected.
It’s also subject to state law.
As for the states that don’t allow for this, kind of insurance, typical insurance claims might be paid out as follows:
- In case you are injured in an accident, which you’re responsible for – Your medical payments coverage, might be handy to reimburse your medical expenditures, up to the limits, which you selected.
- In case you are injured in an accident that’s caused by another driver – The driver who is at fault will have to sort you courtesy of his bodily injury liability coverage.