No-Fault Auto Insurance Law and Legal Definition

According to the no-fault auto insurance laws, the parties involved in the accident are indemnified and reimbursed for losses by their respective insurance companies, no matter who is at fault. No-fault auto insurance system restricts the right of parties to file legal suits to recover for losses caused by other parties and eliminates the need for proof of fault.

No-fault insurance industry increases profits by increasing premiums and by eliminating a major component of fair compensation for victims of automobile accidents, namely, recovery for non-economic losses. Fortunately for drivers, no state has adopted a pure no-fault system for car accident claims, and several have specifically rejected such proposals. Rather, several states have adopted modifications of pure no-fault. In some states, a party's own insurance pays for medical and lost income expenses, and the victim cannot make a claim against the negligent driver for non-economic damages unless and until a threshold has been reached of a specific dollar amount.