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What Is “No-Fault” Insurance and How Does It Work?

Oldham & Smith July 22, 2023

Almost a half-million people moved to the Sunshine State in 2022. Florida leads the country in net migration, meaning thousands of new Florida drivers enter the roadways every year. If you’re new to Florida, you may wonder how car insurance and receiving compensation for costs related to a car accident works. Florida is among 12 “no-fault” insurance states, including Kansas, Massachusetts, Hawaii, Minnesota, New Jersey, Michigan, New York, Pennsylvania, Kentucky, Utah, and North Dakota. Below, we discuss no-fault car insurance, how it works, and how it impacts car accident claims.  

What Is “No-Fault” Insurance?  

Florida Statute 627.736 requires anyone who owns a motor vehicle in Florida to have car insurance with at least $10,000 of personal injury protection (PIP) and property damage liability (PDL) coverage. This insurance coverage is commonly referred to as “no-fault” insurance. PIP pays 80% of your “necessary and reasonable medical expenses,” up to $10,000 (or your chosen plan’s policy limit). PIP coverage also pays a percentage of your lost wages and 100% of replacement costs if your car is totaled in an accident. There is also a $5,000 death benefit.  

No-fault insurance allows accident victims to receive compensation for injuries and damages faster than other insurance systems since you don’t have to wait for insurance companies to determine fault when an accident occurs. It also helps relieve the court system from accident claims and reduces lawsuits, resulting in lower insurance premiums for drivers.  

How Does No-Fault Insurance Compare to Other Types of Car Insurance?  

Insurance companies in states without no-fault insurance review accident details and police reports to establish fault. This process may involve a claims adjuster, who assesses vehicle damage, and a judge, who may make a final fault determination. Once fault is decided, the at-fault driver’s insurance covers all damages related to the accident. Determining fault and being compensated for accident expenses can be time-consuming and complicated, especially when who’s at fault isn’t clear-cut.  

How No-Fault Insurance Works When You Get Into an Accident  

Immediately after an accident, you should move accident vehicles out of the roadway (if you can) and seek medical attention. Then, exchange contact and insurance information with the other drivers involved in the crash. Notify law enforcement, and ensure a police report is written and you receive a copy. Once you’ve left the accident scene and received medical attention, call your insurance company to file a claim for compensation for vehicle damage and medical expenses. 

What Happens if Your Accident Expenses Go Beyond Your PIP Coverage?  

Florida has one of the country’s highest uninsured and underinsured motorist rates. Only $10,000 of PIP insurance is required in the state, which can be quickly used up if you’re involved in an accident that causes serious injuries or involves multiple vehicles. If you have accident-related expenses that go beyond your insurance policy limits and you didn’t cause the accident, you can hire an attorney to help you file a claim with the other person’s insurance to receive compensation for the rest of your expenses. A car accident attorney can also help you receive compensation for expenses not covered by PIP or your regular car insurance. 

Oldham & Smith: Lake County Accident Attorneys 

Don’t go up against big corporate insurance companies by yourself. If you’re injured in an accident and your insurance won’t cover all your expenses, contact our legal team to help you receive the compensation you deserve. Schedule a free consultation or call us at 352-744-7717 to get started.