No-fault vs. Liability Coverage | Cordisco & Saile LLC (2024)

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No-fault vs. Liability Coverage | Cordisco & Saile LLC (1)

Both Pennsylvania and New Jersey have no-fault auto insurance requirements in place. In addition to the no-fault policy, motorists must also carry a liability policy. Understanding the difference between no-fault and liability coverage policies can help you better understand which policy covers what party in an accident.

So what is the difference between no-fault and liability?

The biggest difference between no-fault and liability coverage is who the policy covers.

In general, no-fault coverage pays out to cover the policyholder’s own damages, no matter who caused the accident. Depending on the state’s laws and the individual policy, this may include medical treatment, lost wages, and other crash-related losses.

No-fault coverage includes:

  • Personal injury protection
  • Medical benefits
  • Uninsured motorist protection
  • Underinsured motorist protection

Liability coverage, on the other hand, pays out to cover losses suffered by other people involved in an accident that the policyholder caused. Liability policies cover injuries the policyholder is liable for.

Liability coverage includes bodily injury and property damage.

Pennsylvania and New Jersey require motorists to carry both no-fault and liability coverage, although the laws differ somewhat as to what these policies must cover.

What are the required types of Pennsylvania auto insurance?

Pennsylvania has complicated insurance laws, which include minimum requirements for three types of insurance coverage all motorists must carry. This includes:

  • Medical Benefits: This no-fault policy covers any injuries the policyholder suffers, no matter who caused the crash.
  • Bodily Injury Liability: This coverage pays out for the medical care of others who suffered injuries in a crash caused by the policyholder.
  • Property Damage Liability: This coverage pays for the repair or replacement of any other party’s property damaged in a crash caused by the policyholder.

What types of auto insurance do I need in New Jersey?

New Jersey also requires drivers to carry no-fault coverage, known as personal injury protection, to pay for any medical bills related the injuries they suffer in a car accident.

Motorists must also have a liability policy that covers other drivers’ property damage from an accident you caused.

Like all states, New Jersey requires liability insurance; however, New Jersey offers both astandard policyand a basic policy. The basic policy gives drivers with few assets a less expensive alternative to the standard policy.

Like many other states, New Jersey has complex auto insurance laws. Some of these laws may limit your legal options after a crash, depending on the insurance policy you carry. It is important to understand the types of coverage you have to ensure you have the best policy for your needs.

Contact Cordisco & Saile, LLC for Help Recovering Compensation

Unfortunately, even if you are trying to recover compensation from your own insurer, it is rarely much easier than recovering from another party’s insurer. Both insurers are businesses and will do what they can to deny or reduce your settlement amount.

The car accident attorneys at Cordisco & Saile, LLC serve injured victims in Philadelphia, Bucks County, and New Jersey. To schedule a time to discuss your legal options after an area auto accident, call our office today at 215-642-2335.

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No-fault vs. Liability Coverage | Cordisco & Saile LLC (2024)


What is the difference between no-fault and liability? ›

The at-fault driver still pays for property damage in a no-fault state, and that includes damage to vehicles. This means that if another driver hits you and is determined to be at-fault, they are still liable for your damages. No-fault coverage only refers to injuries.

What is the rule of no-fault liability? ›

In a no-fault claim, the parties are not required to prove any party's blameworthiness to resolve the claim. In contrast, parties to a fault-based claim must prove a party was at fault to prevail on the claim.

What liability coverage is not your fault? ›

Liability insurance coverage is a way to help prevent the at-fault driver or other affected people from being left with significant out-of-pocket expenses. It also helps the not-at-fault driver receive some level of compensation for suffering damage or injury that the accident was found to cause.

What does liability coverage not protect against? ›

Keep in mind that liability insurance coverage doesn't cover your own injuries or damaged property. It only applies in situations where you're legally responsible for someone else's damages.

What is no fault insurance disadvantage? ›

CONS: Fewer legal options: In most states, drivers with no-fault policies are restricted from suing unless the injuries meet a certain severity threshold. Potentially higher premiums: Some say no-fault insurance may lead to higher premiums due to more claims being filed.

What are the three categories of liability without fault? ›

Strict liability applies in three categories of cases:
  • Where the defendant kept wild animals that escaped their confinement and caused damage.
  • Where the defendant engaged in abnormally dangerous activities, which caused damage.
  • Certain product liability actions.

What does no liability without fault mean? ›

Liability without fault is a circ*mstance in which the defendant is held criminally liable for his actions even though criminal intent is absent. In other words, cases of liability without fault require only actus reus, without the mens rea requirement.

What is the simple definition of no-fault insurance? ›

No-fault insurance refers to how injuries are covered by car insurance. In a no-fault insurance state, if you're injured in an auto accident, you would file a claim with your own insurance company to pay for related medical costs. This is regardless of fault.

What is the fault liability rule? ›

“Fault” is a type of liability in which the plaintiff must prove that the defendant's conduct was either negligent or intentional; fault-based liability is the opposite of strict liability.

Does liability insurance cover mistakes? ›

Errors & omissions insurance can help cover financial losses after work mistakes. General liability insurance can help cover medical expenses after accidental injuries to non-employees and property damage for property you don't own.

Does liability coverage mean full coverage? ›

Liability coverage is for injuries and damage to others when you're at fault. Full coverage often refers to liability and other state-required coverages plus damage to your car (comprehensive and collision), but it is not an actual insurance coverage.

What is the rule of thumb for liability insurance? ›

As a rough rule of thumb, auto insurance experts recommend liability coverage of at least 100/300/100 — meaning, $100,000 in body injury liability insurance per person, $300,000 in bodily injury liability per accident and $100,000 in property damage liability per accident.

Why do people need liability coverage? ›

Liability insurance provides protection against claims resulting from injuries and damage to people and/or property. Liability insurance covers legal costs and payouts for which the insured party would be found liable.

Does liability mean fault? ›

“Fault” is a type of liability in which the plaintiff must prove that the defendant's conduct was either negligent or intentional; fault-based liability is the opposite of strict liability. See also Torts.

Does your insurance go up after a claim that is not your fault? ›

Under California law, an insurer cannot increase your premiums when you aren't at fault.

Is absolute liability and no-fault liability same? ›

Activity or Substance: Absolute liability applies to activities or substances that are inherently dangerous or have a high potential for harm. No Fault Requirement: Absolute liability does not require proof of negligence, intent, or fault on the part of the defendant.

Should I call my insurance if it wasn't my fault progressive? ›

We encourage you to contact us any time you have a loss, especially if you're looking to get something repaired. Technically, you're required to report a claim even if it's not your fault. We're here to protect your interests and help when you're involved in an auto accident, no matter who was at fault.

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