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Home > Blog > What is "No-Fault" Insurance?
MONDAY, APRIL 12, 2010

What is "No-Fault" Insurance?

The No-Fault concept is intended to lower the cost of auto insurance by reducing the number of lawsuits filed on auto accidents. This is done on the premise that each insurance company will compensate their own policyholder for the cost of minor injuries regardless whether they were at fault in the accident. Most states that mandate no-fault coverage, known as Personal Injury Protection (PIP), have placed restrictions on when a lawsuit can be filed by parties injured in auto accidents. Typically the threshold whether or not a party can sue is determined by a monetary dollar of medical bills or the severity of the injury.

Texas is considered an “optional” No-Fault state, meaning insurance companies offer PIP coverage but is not mandatory.

Posted 2:20 PM

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