What does no-fault insurance mean? Can you sue the negligent driver in a no-fault state? The fault-based system can be confusing for car accident victims. Let’s shed light on this matter and what you can do to seek justice in a no-fault state.

If you were involved in a car accident and need advice or representation, view our car accident lawyers page here.

The Fault-Based System in Car Accident Insurance

Every state follows a particular fault-based system to determine the party at fault in a car accident. Insurance companies also use the system to decide who will pay for the damages and injuries the accident caused. There are four fault-based systems across the nation: at-fault, no-fault, choice, and add-on, but we’ll focus primarily on no-fault and how it compares with the at-fault system.

What Does a ‘No-Fault’ System Mean?

A no-fault car accident means that regardless of who caused the accident, each party’s auto insurance company will cover their damages and medical expenses. This system speeds up the claim process and helps both parties recuperate from their injuries conveniently.

However, certain rules and limitations exist regarding the victim’s right to sue the at-fault party. In some states, victims can seek compensation if their damages exceed the state’s tort liability threshold. Moreover, some states allow victims to seek compensation for auto damages but not physical injuries.

What Does an ‘At-Fault’ System Mean?

In an at-fault state, car accident victims can seek damages from the at-fault driver’s insurance company. This system allows victims to pursue compensation for their medical expenses, lost wages, and pain and suffering through a personal injury lawsuit.

However, this process can be time-consuming and costly, making it a less desirable option for some car accident victims. Additionally, some states have a limited time frame for victims to file a lawsuit or lose their rights to file a lawsuit.

Other Fault Systems

In a choice-based system, victims can choose between filing a claim with their insurance company or seeking damages from the at-fault party. This system is currently only used in Kentucky, New Jersey, and Pennsylvania.

In an add-on system, both the not-fault and at-fault systems apply. For example, if a car accident without insurance (not at fault) happens in Texas, the victim can sue the at-fault driver. The victim can also apply for first-party coverage so their insurance covers some damages.

Understanding Your Rights After a No-Fault Car Accident

Unlike the at-fault system, the no-fault system is not very straightforward. Victims have limited rights to sue the at-fault party, and these limitations vary from state to state.

Can You File a Case?

Let’s clear one thing first: it’s not always possible to file a case against the at-fault party in a no-fault state. However, there are certain situations wherein state laws allow victims to pursue a lawsuit. These may include:

  • Grave injuries: If the victim’s injuries are severe, they may be eligible to pursue a case against the at-fault party.
  • Economic damages exceeding threshold: Some states have a minimum limit for financial damages to be met before victims can sue.
  • Intentional or reckless actions: If the at-fault party’s actions were willful or reckless, victims may be able to seek compensation through a personal injury lawsuit.

There are several situations where the question of liability would arise:

  • A not-at-fault accident with a rental car: Regarding compensation involving a rental car accident (not at fault), it’s always best to contact an attorney or the rental car company to understand your rights and options.
  • An unlicensed driver: If the unlicensed driver in an accident (not at fault) was driving someone else’s car, the vehicle owner’s insurance may cover some of the damages.
  • No PIP coverage: Compensation can be tricky if you’re involved in a car accident without insurance (not at fault). The best thing to do is find an experienced attorney to advise you on the next steps.

How Much Can You Recover?

The amount a victim can recover in a no-fault car accident case depends on several factors, including the severity of injuries, loss of income, and impact on daily life. In most cases, victims can seek compensation for past and future medical expenses, lost wages, and pain and suffering.

However, keep in mind that each state has specific laws regarding no-fault car accidents and the amount of compensation victims can seek. It’s always best to consult with an experienced attorney in your state to understand your rights and options thoroughly.

How Long Do You Have To File a Case?

The statute of limitation — the timeline for filing a case against the at-fault driver — differs for each state. In some states, you may have as little as one year to file a lawsuit, while others give you up to six years.

It’s essential to act quickly and consult with an attorney who is familiar with the laws in your state to avoid missing out on your chance for compensation. If you miss the deadline, you may lose your right to pursue a case against the at-fault party.

How Do You File a Claim in a No-Fault Insurance State?

Your rights to pursue a claim in a no-fault insurance state can be confusing. To help you understand the process, here’s an overview of what you must do:

  1. Find a reputable car accident attorney: As reiterated, not all no-fault insurance states allow victims to pursue a case. An experienced attorney can advise you on your state’s laws and help you understand your rights and options.
  2. Talk with your insurance company: In most no-fault states, car accident victims must first file a claim with their insurance company. This process is known as the “no-fault” or “personal injury protection” (PIP) claim.
  3. Negotiate with the insurance company: If your case fits your state’s criteria for filing a lawsuit, your attorney will begin negotiations with the at-fault driver’s insurance company.
  4. File a lawsuit: If negotiations fail, your attorney can help you file a lawsuit against the at-fault driver to recover compensation for damages and losses.

Keep in mind that the process of seeking compensation in a no-fault state can be complicated and time-consuming. Hiring the right car accident attorney is critical to protecting your rights and receiving the compensation you deserve.

Talk to Our Car Accident Attorney Today

Navigating the complicated area of car accidents, especially in no-fault states, can be frustrating. You may not receive the compensation you deserve without proper guidance and legal representation.

At Lee, Gober and Reyna, our experienced car accident attorneys have helped countless victims take the appropriate legal actions and ensure proper compensation for their injuries. Contact us today to schedule a free consultation.

Frequently Asked Questions

How does insurance work if it’s not your fault?

Whether it’s your fault or not, insurance coverage works depending on the system your state follows. In no-fault states, you must turn to your insurance company, regardless of who is at fault. In an at-fault state, accident victims may seek compensation for damages and losses from the at-fault party’s insurance company.

Which insurance does not pay regardless of fault?

As mentioned, filing claims for compensation lies on the state’s fault-based system and not the insurance company. However, insurance companies from a no-fault state may impose limitations or rules allowing victims to file a lawsuit against the at-fault party.

For example, they may cover the victim’s medical expenses but limit coverage for car damages. In this case, the insurance company could allow their policyholders to sue the at-fault party for property damage. It’s best to consult an experienced attorney familiar with your state’s laws and insurance policies to understand your rights.

What triggers an insurance investigation?

An insurance investigation can be triggered by various factors, such as the severity of injuries and damages or any inconsistencies in the victim’s claim. In some cases, investigations may also occur when multiple parties are involved and the liability is disputed.

Is Texas a no-fault state?

Texas doesn’t adhere to a no-fault system; instead, it follows an at-fault system, where the person who caused the accident is accountable for resulting injuries and losses. If you’ve been injured in a Texas car crash, you have the option to seek compensation from the responsible party.

What is the disadvantage of no-fault insurance?

The most evident disadvantage of a no-fault insurance system is that accident victims may not hold the at-fault driver responsible for their damages and losses. It also limits the victim’s ability to receive full compensation for their injuries and may lead to lengthy legal proceedings in some cases.