No-fault vs. Liability Coverage

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. You can find the minimum coverage requirements here.

Like all states, New Jersey requires liability insurance; however, New Jersey offers both a standard policy and 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.