Car Accident Injury Recovery in Choice, Fault, and No-Fault Insurance States

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 16, 2021

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The laws of your state regarding car accident fault will be a significant factor in your damage recovery. Whether you are in a Choice, No-Fault, Fault, or Pure No Fault insurance state, these laws will determine if you are able sue the other party for your damages or if your insurance company with be responsible for your damages. Before filing a claim, find out if you are in a fault or no fault insurance state!

TIP:It is critical that you know how your state treats fault before you file a claim or consider a lawsuit. If you have questions, contact a car accident attorney in your area.

No Fault Insurance Laws

In a No Fault insurance state, your own car insurance policy will protect you and provide you with immediate medical treatment. That’s the good news. The not-so-good news is that in no fault insurance states you are limited in your ability to file a lawsuit against the negligent driver for damages. There are 9 states that operate under some form of no fault insurance law — Hawaii, Florida, Kansas, Massachusetts, Michigan, Minnesota, North Dakota, New York and Utah.

If you have been injured in an automobile accident in these no fault insurance states, it does not matter who was at fault, you must file a claim with your insurance company to recover money for your damages.

TIP:All of the no-fault insurance states have a modified system where your insurer pays for your economic damages up to the policy limits in your declarations page, but you may be allowed to sue for non-economic damages such as pain and suffering or loss of services if those damages exceed a certain level. Consult with a car accident attorney to understand your limited right to sue in a no fault insurance state.

Fault Insurance Laws

A fault based insurance system requires the parties who are responsible for the car accident to pay for the damages that they cause. Unlike no fault insurance where everyone is covered under their own policy, in a fault state, the negligent party’s insurance company pays the damages of those who suffered injury or loss of property in the accident up to their their car insurance policy’s limits. If the damages exceed the negligent party’s coverage limits, then any injured party will have to file a lawsuit to recover the balance. Most states use some sort of fault based system to assess and divide responsibility for money damages across all the drivers involved in the accident.

TIP:In many fault based states, more than one driver will be responsible to pay for some percentage of the damages caused in the accident. Keep in mind that deciding fault is not always straightforward, and an experienced car accident attorney can have a significant impact on how fault is determined. Consult a local attorney to find out how your state law determines fault and how they can help you after a car accident.

Choice of Law State

Under a Choice State, you have the choice to elect whether you want to purchase fault or no fault insurance. If you decide to keep your right to sue for personal injury by choosing a policy under the traditional fault based system, then you can file a claim with another driver’s insurance company or sue them to recover your damages. If however you choose to file a no fault insurance claim, you would be limited in your right to sue after your damages. Currently, only the District of Columbia, Kentucky, New Jersey, and Pennsylvania, allow drivers to choose between a fault and no fault car insurance system.

TIP:Choosing between a fault and no fault auto accident claim can have a significant impact on how much money you will recover, what insurance company to file with, how long the claim process will take, and how much it will cost you to file a claim. Consult a local car accident attorney for information and advice before you make a decision.

No Fault Insurance Litigation

No fault insurance states will have some threshold event that, if triggered, allows you to sue a negligent driver for your injuries. The threshold is expressed as either a dollar amount or a verbal description of the type of accident where suits are allowed:

  • Dollar Thresholds: In most no fault insurance states, if your damages exceed a certain amount of money then you are allowed to sue. A dollar threshold for no fault insurance coverage lets the dollar amount of the damages determine whether cases are litigated or not. Claims that fall below the threshold are quickly disposed of through the no fault insurance mechanism. Claims that exceed the stipulated amount can be litigated. These damages thresholds vary from state to state among no fault states:
    • Hawaii ($5000 Threshold)
    • Kansas ($1000 Threshold)
    • Kentucky ($1000 Threshold)
    • Massachusetts ($2000 Threshold)
    • Minnesota ($4000 Threshold)
    • North Dakota ($2500 Threshold)
    • Utah ($2000 Threshold)
  • Verbal Thresholds: Some no fault insurance states use a verbal threshold to determine when you may sue for injuries sustained in a car accident. Under a verbal threshold, there is no specified dollar amount that determines the cases to be litigated. Rather, the threshold for suing — instead of accepting a no fault settlement — is described in words or seriousness. The criteria of seriousness can be expressed in terms of a written description (e.g. permanent disfigurement, scarring, or fractured bones) or expressed in terms of length of disability (e.g. disability for more than 60 days). Injuries that qualify as serious are defined by each state’s law. Florida, Michigan, New Jersey, and New York are the no fault states that do not use a dollar threshold but rely on verbal criteria.

Presumption of Fault in Rear End Collision

Determining who is at fault in rear end collisions can be tricky. However, most state vehicle laws require drivers to follow at a safe distance and be able to stop for vehicles in front of them. If the driver can’t stop, it is generally assumed that he or she is at fault for causing the rear end collision. However, this doesn’t mean that the rear-ended driver is always fault-free. Drivers whose brake or signal lights are out or those that don’t use signals or make extremely sudden turns or stops (i.e. driving recklessly or negligently) can be found partially to blame.

  • When more than one vehicle is involved in a rear end collision: When more than one vehicle is involved, say for instances in a three car rear end crash, where car number 3 rear-ends car number 2, number 2 rear-ends car number 1 then each driver may generally go after the person that hit them as long as they were not also negligent.

TIP:Car accidents can be complicated. Both the circumstances which created the accidents as well as the laws that govern how the resulting damages will be handled. If you ever feel you do not understand the law or how to make a claim for your damages, contact an attorney that will help you.

For more information about auto insurance claims, check out the following articles:

Get a FREE Case Evaluation From An Experienced Auto Accident Attorney.

Car Insurance Claim Process

What Is Your Car Insurance Claim Worth?

Negotiating Your Car Accident Insurance Settlement

Settling Your Car Insurance Claim & Demand Letters

How To Write A Demand Letter

How To Know When Your Car Insurance Settlement Offer Is Too Low

What To Do When Your Car Insurance Claim Is Denied

What To Know About Your Car Insurance Settlement Agreement

Should I Contact a Car Accident Attorney?

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