Does No-Fault Insurance Have Any Responsibility for Auto Repairs?

No-fault insurance means just what it says: coverage is not determined by who was at fault for the accident. Instead, each insurance company is required to pay the costs incurred by its own client. With traditional policies, the driver-at-fault's insurance policy must cover the costs for the other driver, thus determining fault was critical and often a matter of debate. The benefit of this approach for insurance companies is they end up paying much smaller claims for accidents and supposedly can pass on those cost savings to their customers.

No-fault insurance coverage pertains primarily to medical-related losses. For example, if you are involved in a car accident and are taken by ambulance to the emergency room for X-rays, the costs of all your medical care should be covered by your own insurance policy. Of course, there are policy limits, as well as deductibles. No-fault insurance will sometimes cover time lost from work, funeral expenses, and some pain and suffering.

No-fault insurance coverage does not include auto repairs in most situations. One exception is if your car is damaged while being legally parked. Otherwise, your policy will not cover the damage. In most states, however, you can purchase a separate collision policy that will pick up the tab for these damages. Keep in mind that the no-coverage rule applies to anything that is considered a vehicle, including motorcycles and boats. This is not true in all states, so you may want to discuss the specifics of your policy with your insurance agent.

As mentioned, each state's auto insurance laws vary. In some of the states, no-fault insurance is required by law. These states include New York and Massachusetts, as of 2009. Other states give drivers the option of choosing no-fault or more traditional coverage. In states, such as Arkansas and Texas, no-fault insurance is optional and is covered additional to traditional coverage. In the states where no-fault insurance is mandatory, limits on lawsuits related to car accidents have also been put in place. These limits keep recovery amounts below a certain amount in most cases. No lawsuit limits are in place in states where no-fault insurance is considered optional.

Although no-fault insurance would seem to be responsible for your medical bills and other bodily injury expenses in almost any case, that's not actually true. Some drivers find out the hard way that not only are their vehicle damages not covered, but their actions may have voided the coverage. For example, if you are drinking and driving when the injury occurred, your insurance does not have to pay out. If you are committing a crime at the time of the accident (for example, fleeing from the cops or driving a stolen car) the insurance does not have to pay your expenses.