What Is a No-fault Accident Claim?

No-fault insurance doesn't cover damage to your car, only your person.
No-fault insurance doesn't cover damage to your car, only your person. (Image: Jupiterimages/Photos.com/Getty Images)

No-fault auto insurance policies pay regardless of whether you were the driver who caused the accident. When you make a claim on a no-fault policy, it will pay your medical bills and those of your family, but not for your car damage. No-fault policies are also known as personal injury protection or PIP insurance.


If you have a PIP policy and you're injured in a car accident, you can submit a claim for your medical bills and lost income, as well as those of your children and possibly passengers riding with you. The maximum amount of the claim is the value of your coverage: If you took out a $10,000 policy, that's the most you're going to obtain. No fault insurance doesn't cover pain, emotional distress, vehicle or other property damage or any injuries the other driver or his passengers suffered.


If your losses exceed what your policy will pay you may be able to file a claim against the other driver, provided she was at fault. The laws in states with no-fault insurance vary. In some states you can only file if your costs exceed a certain level; in others you must have major injuries, such as a broken bone or a ruined eye; in still others, you can file a claim or sue whenever your costs exceed what your PIP pays.


Each state sets its own insurance laws, deciding, for instance, whether you must buy no-fault insurance or standard liability insurance. In some states, such as New Jersey, no fault is optional. If you buy it, you cannot sue whoever is at fault in an auto accident, but the law also protects you from being sued. States that require regular liability insurance may not allow you to sue if you were even slightly at fault in an accident; other states allow you to sue if you were less than 50 percent at fault.


No-fault states set a mandatory minimum amount of PIP coverage, but you might consider buying more, so that bigger medical bills are covered, even if you were at fault in the accident. If an accident occurs, contact your insurer as soon as possible, and gather all the information you can on the accident, including a copy of the police report. Follow your insurer's procedures for submitting a claim.

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