No-Fault vs. At-Fault Insurance
After a motor vehicle accident, you will likely need to file an insurance claim to get compensation for your losses. Some states follow a no-fault insurance system, while others follow an at-fault system. The differences between the two can have a major impact on your personal injury claim. Keep reading below to learn about no-fault and at-fault insurance.
What Is No-Fault Insurance?
No-fault insurance typically refers to auto insurance that pays for your injuries regardless of who was at fault for the accident. This means that you would file a claim with your own no-fault insurance policy even if another driver caused the accident. No-fault insurance is designed to keep insurance costs low by minimizing the number of small claims that go to court.
Many states across the country follow a no-fault insurance system. Those states include:
- Florida
- Hawaii
- Kansas
- Kentucky
- Massachusetts
- Michigan
- Minnesota
- New Jersey
- New York
- North Dakota
- Pennsylvania
- Utah
A handful of these states (Kentucky, New Jersey, and Pennsylvania) are considered “choice no-fault” states. This means that drivers may choose to follow either a no-fault or at-fault system when purchasing auto insurance. Drivers who choose the at-fault system retain their right to sue other drivers after an accident.
PIP Insurance in No-Fault States
In no-fault states, drivers are typically required to carry personal injury protection (PIP) insurance. Minimum coverages of $5,000 to $10,000 usually apply in these states, but drivers may choose to purchase higher amounts of coverage. After an accident, you would file a claim with your own PIP coverage to get compensation for your injuries.
Victims in no-fault states generally do not have the right to sue the other driver for their damages. They must rely on their own PIP coverage for compensation. However, most no-fault states allow injured victims to sue the at-fault driver if their injuries are severe or their damages exceed their own PIP coverage.
What Is At-Fault Insurance?
At-fault insurance is commonly referred to as auto liability insurance. This type of insurance covers damages that other people suffer due to an accident that you cause. After an accident, liability must be established before the insurance company will pay the claim. This means that you must prove the other person was at fault before their insurance company will compensate you for your losses.
How Do I Prove Liability After a Car Accident?
Proving liability in a car accident claim typically requires proving negligence. That means that you must show:
- Duty of care
- Breach of duty
- Causation
- Damages
North Carolina is considered an at-fault state. As of July 1, 2025, the minimum amounts of coverage required in North Carolina are $50,000 bodily injury per person, $100,000 bodily injury per accident, and $50,000 property damage.
Key Differences Between No-Fault and At-Fault Insurance
There are some major differences between no-fault and at-fault insurance, especially when the time comes to file a claim. Each type of insurance has its benefits, but it also has drawbacks.
Pros and Cons of No-Fault Insurance
No-fault insurance typically allows accident victims to receive compensation more quickly in most cases. This is because there is no need to establish fault after the accident has occurred.
One major drawback of no-fault insurance is that it will not cover all your losses. PIP coverage only covers your medical expenses and lost wages. In some cases, no-fault insurance does not even cover 100% of these losses. For example, it may only cover 80% of your lost wages, and it does not cover any damages for pain and suffering.
Pros and Cons of At-Fault Insurance
At-fault insurance allows you to recover both economic and non-economic damages. Some common types of damages available in claims involving at-fault insurance include:
- Medical bills
- Lost wages
- Out-of-pocket expenses
- Property damage
- Pain and suffering
- Reduced earning capacity
- Diminished quality of life
Having the opportunity to recover non-economic damages can significantly increase the value of your claim.
However, it can take longer to get compensation when using at-fault insurance. This is because you must first prove fault, and the total value of your damages is often open to negotiation. If the insurance company refuses to pay the full value of your claim, you may choose to sue the other driver and take your claim to court.
Other Insurance Coverage Options
In addition to PIP or liability coverage, drivers may also choose to purchase other types of coverage. Uninsured motorist coverage is a popular choice for many drivers. This type of coverage will pay for your damages when a driver causes a car accident and is uninsured. Since many drivers on the road are uninsured, this type of coverage can be highly beneficial.
Contact Chandler Volta Personal Injury Lawyers for a Free Consultation With a Charlotte Personal Injury Lawyer
If you have been hurt in an accident, navigating the insurance system can be complex. You may need an experienced Charlotte injury attorney on your side who can help you recover all the compensation you are entitled to.
Call Chandler Volta Personal Injury Lawyers at (704) 980-9999 to schedule a free consultation.