No Fault Car Insurance

How no fault car insurance works. "No fault car insurance" is a general term that is used to describe any auto insurance system that both requires drivers to carry insurance for their own protection, and that places limitations on their ability to sue other drivers for damages.

In an accident, under no fault laws, your auto insurance company will pay for your damages (up to your policy limits), regardless of who was at fault for the accident. Any other drivers involved will be covered by their auto insurance policies.

Under a pure no fault system, drivers would be completely covered by their own policy, and would be barred from ever suing another driver for damages. However, no state uses a pure system. Instead, all "no fault" states actually use parts of both the no fault system and the standard liability system (under which you're financially responsible for the cost of damages you cause). States do this by permitting lawsuits in certain cases.

Obviously, it's a good idea to understand your state's requirements before you shop for insurance...