The average cost of a car repair after an accident ranges from $100 for bumper repairs to more than $10,000 for a new frame. Most people don’t budget for these contingencies, so even a minimal repair can be cost-prohibitive.
If you were recently involved in an auto accident, you may be wondering who pays for car damage in a no-fault state? To answer this question, you must first understand what type of no-fault state you live in.
In this guide, we want to help you understand the different types of car accident laws in the US. We will also explain who pays for personal injury expenses and property loss if your state requires PIP coverage.
What Is a No-Fault State?
A no-fault state is a state that does not assign fault to drivers after an accident, whether or not the accident was caused by someone’s negligence. Instead, all drivers must carry personal injury protection (PIP) insurance.
PIP coverage helps cover bodily damages after an accident. Your own insurance company will pay for your medical bills and lost wages. However, PIP policies do not cover damage to your vehicle (more on this below).
Only 12 US states enforce no-fault insurance laws. They are:
- New Jersey
- New York
- North Dakota
Of these, Kentucky, New Jersey, and Pennsylvania are choice no-fault states. In choice no-fault states, drivers can choose to purchase full tort liability insurance instead of or in addition to PIP coverage.
Full tort liability insurance enables policyholders to sue after a no-fault car accident. However, these drivers pay much higher insurance premiums. In Kentucky, full tort liability policyholders also lose access to their PIP coverage.
Add-On No-Fault vs. No-Fault States
Another variation of no-fault laws is add-on no-fault insurance. Add-on no-fault states allow drivers to optionally “add-on” personal injury protection coverage to the non-PIP insurance plan.
In these states, adding on PIP insurance does not limit policyholders’ right to file a tort claim if they are injured in the accident. As with full tort liability insurance in choice no-fault states, though, adding this benefit will cost you.
10 US states follow add-on no-fault laws. They are:
- New Hampshire
- South Dakota
Victims in add-on no-fault states may be in for a major payday after a car accident. They may pull from the PIP add-on to cover their injuries. Drivers may also sue the negligent party to increase compensation even further.
In some add-on states, PIP coverage is mandatory. But most add-on no-fault states may require auto insurance companies to offer PIP coverage, though they do not mandate that drivers must purchase it.
No-Fault vs. At-Fault States
No-fault states can be contrasted with at-fault states. In at-fault states, drivers are not required to carry PIP coverage to pay for their own personal injuries after an accident. Instead, insurance companies designate fault.
The person responsible for the victim’s injuries and property damage in at-fault states is the driver who caused the accident. More specifically, it is the at-fault party’s insurance company that covers the victim’s injuries and property loss.
In most cases, figuring out who is at fault for a car accident is not cut and dry. Instead, an insurance adjustor must investigate the accident to assign fault. It is often the case that both drivers share responsibility for the accident.
When both drivers share responsibility for the accident, insurance companies will assign a percentage of the fault. This percentage may come into play when determining negligence during a personal injury lawsuit.
At-fault states use contributory or comparative negligence. Contributory negligence means victims can’t recover damages if they share any fault for the accident. Comparative negligence allows victims to recover damages if they share fault, but their settlement is reduced by their percentage of fault.
Who Pays for Car Damage in a No-Fault State?
In a no-fault state, the driver who is at fault for the accident pays for damage to your car. PIP coverage only reimburses policyholders for injury-related expenses (more on this in a moment).
Property loss compensation in no-fault states works the same way as personal injury laws in at-fault states. In other words, drivers can sue the negligent party for the vehicle repair or replacement expenses incurred.
Again, the share of fault may matter. In some states, drivers can’t be even 1% responsible for the accident that caused their property loss. If they are assigned a 1% or greater share of fault, they can’t file for damages.
In other states, drivers can still sue for property loss if they share fault for the accident. Some states require drivers to hold 50% to 51% or less of the blame. Others allow drivers to sue even if they were 99% at fault for the accident.
However, in these comparative negligence states, the plaintiff’s share of fault will impact their ultimate award. For example, say you are 99% at fault for an accident and win $10,000 in property damages. In that case, the judge would reduce the reward by 99%, leaving you with only $100.
Property Loss Compensation When Third Parties Are Involved
Sometimes, it is not just the negligent driver and the victim involved in an accident that leads to property damage. In these cases, victims may need to sue another party, or better yet, they can sue both parties.
This type of situation may arise in the following circumstances:
- A trucking company failed to keep a negligent driver off the road
- An auto repair shop improperly repaired your or the other driver’s car
- The local government neglected traffic signals
- Another driver dropped trash or other debris on the roadway
- The manufacturer of your or the other driver’s car made a faulty part
Personal injury or property loss lawsuits with multiple defendants tend to pay out more than cases with only one defendant. This is due, in part, to the higher potential for punitive damages.
Punitive damages are enforced by a judge. Lawyers may know the lines of evidence and arguments needed to prove these damages. But more often, a judge orders them to punish a negligent business to de-incentivize future negligent behaviors.
PIP Coverage: Explained
To understand PIP coverage, it can help to think about what this type of insurance does and does not pay for. PIP coverage does pay for the following types of personal injury expenses:
- Medical bills from out-of-pocket expenses
- Lost wages from time spent recovering
- Funeral expenses if someone passes away
- Essential services like childcare costs
Importantly, PIP coverage not only covers the driver’s personal injury expenses. The driver’s policy will also help pay for personal injury expenses of passengers in the vehicle, whether or not the person is named in the policy.
On the other hand, PIP coverage does not pay for the following two expenses after an accident:
- Property damage to your vehicle or the other driver’s vehicle
- Your pain and suffering
Pain and suffering is actually a type of personal injury damage. Specifically, it is a non-economic damage, meaning it is not easily quantifiable. Instead, it refers to the emotional trauma that comes with severe injuries.
To obtain compensation for pain and suffering, a driver would have to file a personal injury claim. But first, they would have to prove the other driver’s negligence in most states.
Filing a PIP Claim
In most states, policyholders have 30 days from the accident date to file a no-fault claim with their insurance company. Failing to file a claim for PIP benefits within this time window will result in a denial.
PIP Coverage Minimums
No-fault states have minimum coverage amounts for personal injury protection. For example, in Florida and Hawaii, drivers are required to carry at least $10,000 in PIP coverage per person.
States like Kansas and New York have itemized requirements. In Kansas, drivers must carry $4,500 per person for medical expenses and $2,000 per person for funeral expenses, among other requirements.
New York is similar. Drivers must carry $50,000 per person in general PIP coverage, as well as a $2,000 death benefit. Learn more about PIP insurance requirements by state in this guide.
What Happens If PIP Doesn’t Cover All Your Personal Injury Expenses?
If PIP doesn’t cover all your personal injury expenses in a no-fault state, you can then sue the negligent party or parties. But first, your share of the fault must be determined.
Remember: in some states, you must not share any fault for the accident if you want to file a lawsuit. In others, you can file a tort claim if you were at fault, but you may not receive as much compensation.
Understanding the ins and outs of comparative vs. contributory negligence and the various types of comparative negligence is challenging. That’s why you need Sweet Lawyers on your side.
Call a Car Accident Attorney to Understand Your Rights
So, who pays for car damage in a no-fault state? The negligent driver’s insurance company pays for victims’ property loss. Meanwhile, each driver’s personal injury protection (PIP) plan pays for their own personal injuries.
Not sure whether you live in a no-fault or at-fault state? The car accident attorneys at Sweet Lawyers can help you navigate your state’s insurance and accident laws. Contact us for a free consultation to get started.