Fault and no-fault car insurance laws refer to a state’s rules for how an accident victim must handle the claims-filing process. Most states practice fault-based laws, but 13 states mandate no-fault insurance policies. Pennsylvania is unique in that it is neither a fault nor a no-fault state. It instead classifies as a choice, or hybrid, state. This means it is up to each individual driver whether to purchase fault or no-fault auto insurance.
Fault vs. No-Fault Insurance States
In a fault-based insurance state, an accident victim cannot receive financial relief for medical bills or property damages until he or she proves who was at fault for the crash. This is because the at-fault party’s auto insurance company will pay for damages. In fault-based insurance states, crash victims can either file claims with the at-fault party’s insurance company for a settlement or file personal injury lawsuits against the negligent driver for further damages, regardless of the seriousness of injuries.
In a no-fault insurance state, victims of a crash will seek damage recovery through their own auto insurers, regardless of who was at fault for the crash. The victim does not have to determine fault or prove negligence to obtain immediate financial recovery. The victim will file the claim with his or her insurance company and receive a prompt response. More states began switching to a no-fault system because victims often need financial assistance right away for medical bills and property damages, and may not be able to wait until the conclusion of an investigation.
Under no-fault insurance laws, crash victims typically cannot file personal injury claims unless their injuries meet a threshold to qualify as serious. Each state defines this threshold differently, but it generally means injuries that cause temporary or permanent disabilities, loss of body or organ functions, or loss of limb. If crash injuries do not meet this threshold, an insurance claim will be the only recovery available to the victim.
Pennsylvania’s Car Insurance Laws
Pennsylvania uses both fault and no-fault insurance laws. It gives its citizens the choice of which type to choose when purchasing insurance policies. Its hybrid laws are complex, and require drivers to fully understand both systems, as well as their benefits and drawbacks, before taking out policies. Pennsylvania drivers will have the choice to either opt in or opt out of no-fault insurance rules.
If they opt in, they will receive benefits from their own insurance companies after a crash regardless of fault. If they opt out, they will have to prove fault to file a claim with the negligent party’s insurance company. Drivers have to choose their preferred type of auto insurance when buying the policies, not after a collision. Once they purchase their insurance type, they must stick with it until they are eligible to switch plans, typically at the end of the contract period.
When purchasing insurance, drivers may not see the language fault or no-fault. Instead, the state refers to the options as full tort or limited tort. Full tort insurance means the driver is opting out of the no-fault system, and prefers to use fault-based rules after an accident. Limited tort means the driver is opting in, and wants no-fault insurance. Selecting limited tort insurance limits the driver’s ability to file a lawsuit for most car accidents, other than very limited exceptions. It means the driver surrenders many rights if a crash occurs.
How to Choose the Right Insurance Plan
Before you purchase car insurance in Pennsylvania, do your research into both fault and no-fault systems. Consult with an attorney to discuss each option in more detail before you buy. If you have already been in a car accident, a lawyer can help with filing your insurance claim or investigating fault for a crash. Consulting with a Philadelphia car accident lawyer can ensure you obtain fair compensation for your damages.Back to Blog