An auto insurance system used in some states where each driver's own insurer pays for their injuries regardless of who caused the accident. No-fault laws are designed to reduce lawsuits and speed up claim payments, though they limit your right to sue except in serious injury cases.
Related Terms
Bodily Injury Liability
Auto insurance coverage that pays for injuries you cause to other people in an accident where you are at fault. It covers medical bills, lost wages, pain and suffering, and legal defense costs. Most states require minimum bodily injury liability coverage.
Liability Coverage
Insurance that pays for bodily injury and property damage you cause to others. In auto insurance, liability coverage is required in almost every state. It does not cover your own injuries or vehicle damage — you need collision and comprehensive coverage for that.
Tort
A civil wrong that causes harm or injury and gives the injured party the right to seek compensation through a lawsuit. In auto insurance, tort states allow you to sue an at-fault driver for damages, unlike no-fault states which restrict such lawsuits.