The three types of no-fault insurance are pure no-fault, choice no-fault, and add-on no-fault. No-fault insurance refers to a legal system that requires drivers to use personal injury protection (PIP) insurance to pay for their medical expenses after any accident and restricts their ability to sue an at-fault driver. The main differences between the three types of no-fault insurance have to do with their exact PIP requirements and lawsuit restrictions.
Types of No-Fault Insurance
Policyholders are required to have personal injury protection and can only sue the at-fault driver if they are severely injured or incur a significant financial loss. Used in nine states.
Policyholders are required to have PIP but may opt-out of the no-fault system that restricts lawsuits. Used in three states.
PIP is either required or optional, and there are no restrictions in place regarding lawsuits. Used in eight states and the District of Columbia.
If you don’t live in a state where no-fault insurance is available, you can instead purchase medical payments coverage (MedPay). This type of insurance provides coverage that is similar to PIP, but it is not considered “no-fault” insurance because it is not available in any of the no-fault states.
To learn more, check out WalletHub’s guide to no-fault insurance.
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