What Does No Fault Car Insurance Mean in an Accident?
Sometimes, when people are hit by another driver, the other driver tells them that since Pennsylvania is a no fault car insurance state, it isn’t their problem. Of course, these people are wrong. When someone else hits your car, he still has responsibility for the damage he caused.
No Fault Car Insurance
What it comes to car insurance, all no fault means in Pennsylvania is that the insurance company will cover the cost of the insured’s physical injuries regardless of who was responsible for the accident. This means that your own insurance company will pay for your medical damages up to the personal injury protection (PIP) limit of your insurance, regardless of who caused the accident. The extent of what you can recover is based on a choice you make between limited and full tort insurance.
Property Damage is Not No Fault
Property damage is covered by the person who caused the accident. This means if someone else hit your car and caused $5,000 in property damage, then that person’s insurance will have to pay for that amount. If the person does not have enough insurance to cover the damage, the person who hit your car now is personally responsible for the additional cost. For example, if the person caused $7,500 of damage to your car but only has $5,000 in insurance, his insurance company is only going to pay $5,000. This is where underinsured motorist comes in (UIM.) Your insurance company will pay up to your limits when your car is damaged to cover the difference between what is available from the other person’s insurance company and yours. However, the insurance company will only pay the maximum amount it is required to pay under your policy. This is why it is wise to have more than the minimum amount of insurance required on your car. It is also why you should always have UM (uninsured motorist) and UIM for your automobile.
Pennsylvania is Choice No Fault
In Pennsylvania we are actually what is called a “choice no fault” insurance jurisdiction. This means that you can choose whether to obtain full tort or limited tort insurance. Full tort and limited tort impact what kind of compensation you can receive when you are injured. When you pick full tort, you are basically choosing to stay outside of the no fault limitations of your insurance. It is always better to pick full tort, since limited tort substantially limits your right to recover if you are injured and inconvenience due to an accident.
Why No Fault?
Why do we have no fault insurance? The reason is to avoid litigation over medical bills in small claims court. Without no fault insurance, every time there is an accident and someone suffers a minor accident, the parties end up in small claims court disputing who was responsible. With no fault, each insurance company takes care of its own customer by handling claims for minor injuries.