/ Blog/ No-Fault and Fault Insurance in Indiana: Know the Difference
If you drive, you most likely have automobile liability insurance. Even if you’re the most cautious driver, there’s always risk of getting into an accident. That’s why it’s a requirement in all of the United States for drivers to be covered by some state-minimum insurance policy. However, different states have their own laws and standards. Most of these differences concern the right to sue after an accident and determine whether or not benefits are rewarded without regard for who’s at fault for a car accident.
There are two types of insurance policies, and depending on the state, they either enforce one or the other: No-fault insurance and fault insurance. They will vary slightly per state, though. Here’s what you need to know to stay up to speed.
Also called personal injury protection (PIP) insurance, no-fault insurance settles insurance claims outside of court. No-fault insurance eliminates injury liability claims and lawsuits in smaller courts—with the tradeoff being that the insurance company directly pays certain damages. You can recover damages for medical bills and lost wages regardless of who is at fault for the accident. However, the coverage is limited. There is a limit to the amount you can recover for medical bills and lost income; there is no compensation for pain and suffering, emotional distress, or inconvenience, and you cannot get any money to cover vehicle damage.
What you can do in a no-fault system is sue outside of it. Some states’ no-fault laws allow a driver to file liability claims or lawsuits against the other driver. This is a way that you can obtain compensation beyond your PIP benefits for medical bills and income loss and the only way you can get general damages back after your accident.
Indiana, along with the majority of other states, has fault (or tort liability) auto insurance. In a tort system, insurance companies pay damages to drivers depending on each person’s degree of fault. Some policies will allow you to sue for damages such as medical expenses, lost wages, and pain and suffering. These policies will require that a minimum amount of liability coverage is purchased for car insurance policies, but higher levels of coverage can be purchased. Your policy will pay for the other driver’s expenses when you’re at fault.
In states that don’t have mandatory PIP insurance or don’t offer it, you will have to pay for some of your own expenses after an accident. Usually this will take the form of paying for your injuries from your medical payments coverage; any damage to your vehicle or other property damage costs would fall under your collision coverage.
When you’re in a car accident, it’s important that you get a strong team on your side in order to recover in all the ways you deserve. The car accident attorneys at Wilson Kehoe Winingham may just be the team you need. Give our auto accident lawyers a call today at 317-920-6400 or 800.525.8028 or contact us online for a free, no obligation evaluation of your case.
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