No Fault Insurance (Noun)
Meaning
A system of automobile insurance where a party who is injured in an automobile accident recovers damages up to a specific amount against his own insurance company regardless of who was responsible for the accident; "the amount of litigation resulting from minor accidents is reduced by no fault insurance".
Classification
Nouns denoting possession and transfer of possession.
Examples
- No fault insurance is a system where the victim of a car accident can recover damages from their own insurance company, without having to establish liability.
- Under a no fault insurance system, each driver's insurance company pays for their own policyholder's damages, regardless of who caused the accident.
- The no fault insurance system eliminates the need for litigation to determine who was at fault in an accident.
- In the US, the states of New York, Florida, and Michigan have no fault insurance laws, where drivers are required to purchase this type of insurance.
- The primary benefit of no fault insurance is that it reduces the amount of litigation resulting from minor car accidents.