No fault car insurance, sometimes referred to as PIP (which stands for “personal injury protection”) is an auto insurance option that’s only available in certain states. No fault insurance dictates that the insurance company of the injured person pays for all medical bills and other costs that go above and beyond the physical damage done to the vehicle.
How Does it Work?
If you’re involved in an accident, even if you live in a no fault state, damages to your vehicle are still covered by the insurance company of the person at fault for the accident. However there are specific limits to legal action you can take to recover the cost of medical bills and pain and suffering. The limits are all determined on a state by state basis.
Is No Fault Insurance Fair?
No fault insurance eventually leads to the question of fairness—if someone’s negligent actions behind the wheel caused a six-car pileup, why should the insurance companies of all the other good drivers who were involved have to pony up? This is a good question that’s often rebutted: no fault insurance might be unfair, but it’s a good thing in the long run. This is an assertion made by the proponents of no fault car insurance, who see it as a way to cut down on costly and time consuming lawsuits that usually come about as a result of accidents.