There are many types of auto insurance policies available through major insurers. You are probably most familiar with bodily injury and property damage coverage. Many states require you to maintain a certain level of coverages, ensuring that if you cause an accident, your insurance will cover another person’s vehicle or other property damage, injuries or death. Yet there are other types of auto insurance policies that cover a broader range of situations, including no-fault insurance, also called personal injury protection insurance, or PIP. This type of policy covers injury expenses no matter who is responsible for an accident.
No-fault insurance covers your medical expenses for injuries suffered in a collision no matter who caused the crash. If you are hurt in a car accident, whether you or another driver is at fault, you file the claim with your own auto insurer first.
What Is Covered Under No-Fault Insurance?
No-fault insurance is about financially protecting you if you are injured or protecting your family, if you are killed. Typically, it covers injury-related expenses, including:
- health insurance deductibles
- medical expenses beyond health insurance coverage
- lost income due to time away from work due to injuries
- essential services you cannot perform while injured
- funeral expenses
The exact benefits you receive depend on the policy you purchase. Not every provider offers the same benefits. Your policy limit – the maximum amount of compensation you may receive – also varies based on the policy you buy.
As for damage to your vehicle or to the personal property inside, this is usually covered by a different auto policy. You may have collision or comprehensive coverage, or you may have to file a claim against the other at-fault driver’s insurance company.
Do You Have to Pay a Deductible if You Are Not at Fault?
Whether or not you have to pay the amount of your deductible after a car accident depends. If you are not at fault for a two-vehicle collision, your no-fault insurance provider may waive the deductible. However, this is not guaranteed. You should always assume you will have to pay your own deductible, yet work with your insurance company to have it waived or refunded.
Also, you may be able to have the at-fault driver’s insurance pay for the deductible. If you are in a crash and you also file a third-party claim against the responsible driver’s policy or if you also need to file a personal injury lawsuit, you can seek compensation for out-of-pocket expenses, like the deductible.
Which States Have No-Fault Insurance?
These states require that you carry no-fault insurance:
- New Jersey
- New York
- North Dakota
You also have the option to purchase no-fault insurance in:
- District of Columbia
- New Hampshire
- South Dakota
In other states, it may not be an insurance product you can purchase. However, there may be other products that provide you with coverage in case the at-fault driver does not have any insurance or insufficient coverage to pay for injuries and property damage.
Also, keep in mind that state laws change. Your state may have required no-fault auto insurance at one time, yet no longer does. Or, your state may have previously required only bodily injury and property damage coverage and has since switched to a no-fault model. If you move or have just purchased a vehicle, always research your state’s specific auto insurance requirements.