How does "no-fault insurance" function?

How does "no-fault insurance" function?

• A. Only one party pays for the damages regardless of fault
• B. Each party's insurance covers their own damages regardless of who is at fault in an accident
• C. It eliminates all liability for damages
• D. It allows drivers to claim damages from the other party's insurance

Answer: (B)

No-fault insurance is designed to simplify the process of handling claims after an accident by allowing each party involved to rely on their own insurance coverage for damages, regardless of who was at fault. In this system, individuals are compensated for their own bodily injuries and property damages without needing to establish liability. This promotes quicker resolutions since it minimizes disputes over who is at fault and reduces the burden on the court system. It's important to understand that while no-fault insurance provides certain benefits, it does not eliminate all liability. Under certain circumstances, individuals may still be able to pursue compensation outside of the no-fault framework if the injuries meet specific criteria, such as being severe or resulting in significant lost income. However, the core principle remains that each party's insurance is responsible for covering their respective damages.

No-fault insurance is designed to simplify the process of handling claims after an accident by allowing each party involved to rely on their own insurance coverage for damages, regardless of who was at fault. In this system, individuals are compensated for their own bodily injuries and property damages without needing to establish liability. This promotes quicker resolutions since it minimizes disputes over who is at fault and reduces the burden on the court system.

It's important to understand that while no-fault insurance provides certain benefits, it does not eliminate all liability. Under certain circumstances, individuals may still be able to pursue compensation outside of the no-fault framework if the injuries meet specific criteria, such as being severe or resulting in significant lost income. However, the core principle remains that each party's insurance is responsible for covering their respective damages.