Who Pays for Car Damage in a No-Fault State?
Last Updated on September 20, 2023
If you live in a no-fault state, you may be curious about who pays for car damage.
Like at-fault states, no-fault states require the at-fault driver to cover the cost of repairing vehicle damage.
Unlike at-fault states, however, no-fault states require drivers to receive compensation for medical bills through their own insurer, regardless of fault.
Keep reading to find out who pays for car damage in a no-fault state.
Table of Contents:
- The At-Fault Driver Pays for Car Damage in All States
- How No-Fault Car Insurance Works
- Who Pays for Car Damage in a No-Fault State?
- No-Fault Insurance Does Not Cover Damage to Your Own Vehicle
The At-Fault Driver Pays for Car Damage in All States – Including No-Fault States
Twelve states in America are considered no-fault states. The others are tort states or at-fault states.
Regardless of where you live, however, the at-fault drivers pay for car damage.
Yes, even if you live in a no-fault state, insurers still consider fault when determining who pays for vehicle damage. In all states, the at-fault driver is required to cover the cost of repairing or replacing the vehicle to pre-loss condition.
After an accident, insurers and investigators determine who caused the accident. In some cases, one driver was 100% at fault. That driver is required to cover 100% of the cost of vehicle repairs. In other cases, the fault is split, and both drivers pay for car repairs based on their share of the fault.
How No-Fault Car Insurance Works
No-fault car insurance primarily covers medical bills and personal injury expenses after an accident. It does not change the way insurers cover car damage.
Here’s how no-fault insurance works if you live in one of 12 no-fault states:
- Most no-fault states require drivers to carry personal injury protection (PIP) or medical payments coverage (MedPay).
- PIP and MedPay reimburse drivers for medical bills and lost income after an accident, regardless of fault.
- If you live in an at-fault (tort) state, you will receive compensation for medical bills and lost income from the other driver’s bodily injury liability insurance.
Property damage, however, works the same in all states, regardless of whether they use a no-fault or at-fault system. The at-fault driver is required to cover the cost of repairing any property damaged due to their actions – including the cost of repairing any vehicles or other property.
No-fault insurance does not automatically include coverage for your own vehicle. You must buy full coverage car insurance (with collision and comprehensive coverage) to receive compensation for damage to your own vehicle after an accident (assuming you were at fault).
Specific rules and requirements vary between states. Some states, like New Jersey, allow drivers to opt out of the no-fault insurance system. Drivers can choose whether or not to participate in the system.
Who Pays for Car Damage in a No-Fault State? 3 Options
Overall, there are three options when deciding who pays for car damage in a no-fault state, including:
Option #1: Your Own Collision Coverage or Comprehensive Coverage (If You Are Partially or Fully At Fault)
If you are partially or fully at fault for a car accident, then your own collision or comprehensive coverage would cover the cost of car repairs. You make a claim through your own insurer, and your insurer covers damage up to the actual cash value of your vehicle. You pay a deductible, and your insurer covers the remaining costs.
Option #2: The At-Fault Driver’s Insurance Pays (If They Were Partially or Fully At Fault)
If the other driver was partially or fully at fault for the accident, the other driver’s car insurance policy pays for car repairs. You make a claim through the other driver’s property damage liability coverage, which covers the cost of repairing your vehicle up to its actual cash value. The other driver pays the deductible. If the fault is split, each driver’s insurance pays a portion of car repairs based on shared fault.
Option #3: A Lawsuit or Investigation Determines Who Pays
In some cases, both drivers claim the other is at fault. In this situation, drivers could file a lawsuit to determine who pays for car damage and other expenses resulting from the car accident not covered by no-fault insurance.
No-Fault Insurance Does Not Cover Damage to Your Own Vehicle
It’s important to remember no-fault insurance does not cover damage to your own vehicle.
If you cause an accident, your insurance will cover damage to the other driver’s vehicle (via your property damage liability coverage). However, you need comprehensive or collision coverage to receive compensation for your vehicle. Otherwise, you need to pay for vehicle repairs out of pocket.
Overall, no-fault insurance covers certain damage you incur after an accident, regardless of fault. However, you must carry comprehensive or collision coverage if you want your insurer to cover the cost of repairing or replacing your vehicle.
Final Word – Car Damage in a No-Fault State
The at-fault drivers pay for car damage in a no-fault state – just like they would pay for car damage in an at-fault (tort) state.
No-fault states use a no-fault insurance system for medical bills, lost wages, and similar expenses after an accident. Your insurer covers these costs automatically after an accident, regardless of fault.
However, property damage falls under a traditional fault-based insurance system, even in no-fault states. If someone else damages your vehicle and is 100% at fault, then that person needs to compensate you for the cost of repairing or replacing your vehicle.
Contact your insurer to verify you have adequate coverage in your no-fault state.