Twelve states in the United States make No-Fault Insurance programs available to drivers. New York, Florida and Pennsylvania are among those states. No fault insurance is available in Washington, D.C. as well. In the event of an accident, No-fault coverage extends to the policyholder only. No-fault automobile insurance is designed to decrease the number of lawsuits following automobile accidents.

Settlements obtained in a lawsuit are limited by No-fault insurance policies. Respective insurance companies are expected to pay for the damages to their policyholders involved in accidents, whether at fault or not.

The two primary reasons states offer No Fault insurance are to ensure all drivers have access to immediate medical care following an accident, without questions and to decrease lawsuits.

No Fault insurance limits the amount obtained by clients in lawsuits filed following traffic accidents. Everyone involved is deemed to be not at fault, no matter who causes the accident.

In some states, the premium for no-fault insurance raises the amount of premiums paid by all policyholders because the insurance companies have to pay related settlements, whether or not holder was at fault. No Fault insurance punishes safe drivers while rewarding those drivers with poor driving safety records by increasing rates and eliminating discounts. Comparison-shopping in the states where no-fault insurance is available can ensure the lowest insurance premiums possible.

Under No fault insurance, each party involved in an accident is required to file a claim with their insurance company. This is aimed at eliminating the abuse of unnecessary medical testing. Following accidents, some drivers will go to chiropractors for years in hopes of obtaining a significant settlement in a lawsuit. No fault insurance eliminates abuse of the medical and legal systems and allows those who need treatment to seek medical attention for injuries.

No fault automobile insurance has both good and bad qualities. On the bad side, it offers no incentives for safe drivers by offering a safe driver discount.

However, it does manage to cut down on frivolous lawsuits and unnecessary medical costs and insures that anyone in an accident can receive the medical attention they need.