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Healthy Thinking

Understanding No-Fault Insurance

Posted by on Apr 13, 2015

No-fault insurance is not as simple as most people believe it to be. There are several variations, which primarily affects the right to sue if you are injured in a car accident.

Pure No-Fault Insurance

In a pure no-fault insurance, the insurance company pays for the medical costs and benefits of the first party (the policyholder), also known as personal injury protection (PIP), and limits the right of one party to sue the other for any type of damage. This is called a “limited tort.” No state currently has laws for this type of no-fault insurance.


States that have no-fault insurance laws all allow the injured party to sue a liable party for general or non-economic damages if it reaches the established threshold. Some states have a monetary threshold, in which the injured party can sue if the damage reaches a certain amount i.e. $250,000. Others establish a verbal threshold, in which the injured party can sue if it results in death or if the injury is “serious.”

There are 12 states that currently have no-fault insurance laws. Kentucky, Kansas, Massachusetts, Hawaii, North Dakota, Utah, and Minnesota use a monetary threshold, while New Jersey, New York, Pennsylvania, Florida, and Michigan have verbal thresholds. Motorists in Kentucky, Pennsylvania, and New Jersey have a “choice” no-fault insurance law, which means they can choose to retain their right to sue.

According to the website of the Abel Law Firm in Oklahoma, which is not a no-fault insurance state, in most cases injuries sustained in car accidents are devastating. The threshold merely officially recognizes how much damage a negligent car accident can cause.

If you have sustained serious injury in a negligent car accident, it does not matter if your state has a no-fault insurance law or not. You are entitled to compensation for your losses. Contact an experienced personal injury lawyer in your state to know your rights and legal standing.

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