No Fault vs At Fault States

May 16, 2022 | Chris Costello, Esq.

What are No Fault States vs. At Fault States?

There are sets of laws in each state that determine whether the goal is to determine fault after an accident or make sure that no one is injured. Typically, states are divided into either at fault or no fault status concerning who handles compensation for accidents afterward. Find out what does no fault state mean and if the state you live in is no fault or at fault.

What Is an At Fault State?

An at fault state works to determine blame from the moment the car accident happens. Witnesses who were party to the accident must give statements, and any nearby cameras might be investigated for information about the incident. No one is allowed to leave the scene, even if they are uninjured, and a police report must be filed regardless. 

Determining Fault for Compensation

Typically, at fault accidents are quickly resolved by determining fault. There is usually one clear at fault person. For example, someone ran a red light or veered into another lane. However, in some cases, there is not always one defining party that causes the accident. Sometimes, the person who caused the accident is not even part of the actual collision scene.

For example, someone may have swerved to avoid hitting a deer in the road, causing the car behind them to brake and the car behind them to rear-end that person. While the two cars that collided are part of the police write-up, the root cause of the accident is a result of someone else. Situations like this one are why many states adopted no fault insurance. 

No matter if the impetus of the wreck was caused by someone else entirely, the two people in the collision are left to determine fault. In some places, compensation for wages lost or pain and suffering is also requested. 

Liability Insurance Compensation 

Liability insurance is the least amount of insurance you can carry in an at fault state. Liability insurance is the lowest cost approach to at fault insurance. However, buyers should beware. The low cost of liability insurance is high risk if you do not have substantial savings; liability only covers the expenses related to the other driver’s losses, not yours if you are at fault. 

Remember, liability only covers costs from the actual accident. You are still liable for your expenses for losses incurred due to the accident. You may also be responsible for any court costs should the other party sue for additional damages

Full Coverage Insurance Compensation 

Full coverage insurance provides coverage for the other person’s losses in the event of a vehicle accident, your losses, and then some if additional costs arise from the aftermath. For better coverage and increased peace of mind, most people buy into it as part of a bundle for home, car, and life insurance policies through insurance providers. However, the cost of full coverage insurance is far greater than liability, even in a bundled plan. For some people, the low price of liability outweighs the high risks. 

What Is a No Fault State?

An actual no fault state requires that all drivers maintain insurance that will cover the costs of an accident. However, the formal definition for no fault denotes states wherein insurance pays out benefits first, and there are restrictions placed on the right for parties to sue.

It does not matter who was at fault for the accident; each person’s insurance pays for the cost of injuries, damages, or other losses incurred first. In some instances, it is possible to sue the opposite party directly to recover additional expenses, like the wages lost or pain and suffering claims prevalent in at fault cases, but this ability is not available in every no fault state. 

Advantages of No Fault States 

No fault states are advantageous because they help move through the justice system more quickly. This increased speed is vital for citizens because it does not weigh down the justice system with unwarranted court cases filled with minor car accidents.

People also benefit because pay-outs are typically faster in no fault states. After all, determining the reason for the accident is null and does not hinder compensation. Even if you were the direct impetus of the accident, your no fault insurance would pay for some if not all of your claims, both injurious and vehicular. 

What States Are No Fault States?

Certain states are considered no fault states, but they might also have specific add ons or choice options that slightly differentiate insurance from traditional no fault states. 

True No Fault States 

There are ten actual no fault states with first-party benefits and restrictions on lawsuits.

  • Florida 
  • Hawaii
  • Kansas 
  • Massachusetts
  • Michigan 
  • Minnesota 
  • New York 
  • North Dakota 
  • Puerto Rico 
  • Utah 

Choice/ No Fault States 

Three no fault states that are still considered authentic no fault do not have restrictions on lawsuits but do have some thresholds. These three states give drivers the choice of whether or not to carry no fault insurance or participate in a traditional liability system. 

  • Kentucky 
  • New Jersey 
  • Pennsylvania 

Add On States

Drivers will receive compensation just as they would in no fault states from their own insurance company, but there are no restrictions on lawsuits in add on states. The add on system is a hybrid in which first-party benefits are in place with the legal pursuance of the traditional tort liability system in ten other states. 

  • Arkansas 
  • Delaware 
  • Maryland
  • New Hampshire 
  • Oregon 
  • South Dakota 
  • Texas 
  • Virginia 
  • Washington 
  • Wisconsin

A Place of Its Own

Washington DC is anomalous in the way of insurance. Not only is the District of Columbia not an add on nor a true no fault state, but it is neither. When drivers sign up for insurance, they are offered the same choice system that drivers in Kentucky, New Jersey, and Pennsylvania are privy to choosing. 

However, if drivers in DC initially chose no fault benefits and are in a collision, they have up to 60 days to revise that decision. They can decide in that 60 days to choose whether to continue with their no fault insurance benefits or to file a claim and attempt to recover compensation that way. 

Work With Experienced Professionals 

For more information about recovering compensation from vehicle accidents, contact our professionals at Costello Law Firm specializing in personal injury law, worker’s compensation, and healthcare provider law.

Chris Costello, ESQ.

Chris Costello, ESQ.

Chris handles matters in both New Jersey and Pennsylvania and is an active member of the New Jersey Association for Justice as well as the Burlington County Bar Association. As a Burlington County personal injury lawyer, Mr. Costello has served as chairman of the Burlington County Bar Association Personal Injury Committee and lectured on topics related to auto accidents and insurance law.

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