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How No-Fault and At-Fault Insurance Systems Differ

Rick Jaklitsch

Rick Jaklitsch, an award-winning attorney practicing in Maryland, leads his own law firm as owner. Through this firm, Rick Jaklitsch and his team handle personal injury matters, such as car accidents.

After a car accident, most people are concerned with figuring out who will pay for vehicle damages and health bills relating to the accident. Figuring out who is fiscally responsible for such things depends on whether the state in which each person lives is an at-fault or a no-fault state.
No-fault states employ a unique insurance system that provides policyholders with protection regardless of who caused the accident. In such states, drivers are usually not eligible to sue for personal injury until they have exhausted their own insurance policy coverage. However, this does vary slightly depending on state laws, and some drivers in no-fault states may only be required to reach a certain amount of medical bills or have an injury that is serious enough before making a personal injury claim.
At present, there are only 12 states in the United States that are no-fault states. This means the vast majority of states, including the State of Maryland, are at-fault states.
In at-fault states, the insurance system does not require that drivers exhaust their insurance coverage before making a personal injury claim. This is because at-fault states determine which driver compensates the other following an accident based on each driver’s amount of fault. Within these states, drivers also have the option of seeking additional damages from the at-fault driver if their insurance policy does not cover the entire cost of the losses.

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