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What does no-fault system mean in insurance?

No-fault insurance refers to how injuries are covered by car insurance. In a no-fault insurance state, if youre 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 advantage of a no-fault system for states?

In terms of damages to vehicles and their contents, those claims are still based on fault. No-fault systems focus solely on issues of compensation for bodily injury, and such policies pay the medical bills for drivers and their companions no matter whose fault the collision was.

How does Michigan no-fault insurance work?

Facts on No-Fault insurance If you are injured in an accident, this portion of your policy pays you and members of your household, within the stated limits, for medical expenses, lost wages and replacement services. These costs are paid no matter who is at fault. It does not pay for property damage to your vehicle.

Is no-fault insurance a good thing?

Generally speaking, no fault insurance is a good thing because it reduces how often accidents end up in court, which adds expenses and (more importantly) delays compensation for people who suffer losses in accidents.