You may have heard of no-fault insurance, where states require drivers to carry personal injury protection (PIP) to pay for their own medical bills, regardless of who is at fault for an accident. No-fault states are not the same as tort states. Tort states hold drivers responsible for any injuries or damages they cause others.
There are however a few states that allow drivers to sue for damages, including New Jersey, New York and North Dakota. There are two types of tort insurance. Bankrate can help explain the differences and how they affect your car insurance.
What is tort insurance?
Tort insurance allows auto insurance companies to recover the damages from the party that caused an accident. Tort insurance is not offered by all insurance companies and it depends on where you live.
Many states require that vehicle owners have some type of insurance. Each state has its own regulations and limits. Some states are no-fault. This means that each person is responsible for their own medical bills and injuries, regardless of fault. Most states in the United States follow tort insurance law. This means that the person who caused the loss is financially responsible. New Jersey, New York and North Dakota are all no-fault states. However, Pennsylvania, Kentucky, New Jersey and New York allow drivers to sue for damages.
Limited tort vs. full tort
Tort law is complex. You may be able to sue for damages if you have the right to do so. In the three states with tort options, Kentucky, New Jersey, and Pennsylvania — where there is no fault — limited vs. complete tort terminology is most commonly used. These states may allow you to keep your right to sue another driver. This is essentially opting out from your state’s no fault laws.
What is the difference between full and limited tort? These states have no-fault laws that only cover injuries and medical expenses. Property damage is always resolved on a tort basis. This means that the at-fault party will always be responsible for any damages caused to other vehicles or property. These states have limited and full tort terms that only apply to drivers who choose to keep their rights to sue for injuries.
As the name implies, limited tort limits what you can sue another driver. A limited tort claim is one that you can only bring against another driver for serious injuries. Each state will determine the threshold. Limited tort is often cheaper but does not allow you to recover as much as you could under full tort.
What is full tort? Full tort expands your rights to sue the at-fault driver. You may be able not only to sue the driver for serious injuries but also for pain and suffering.
Property damage is always dealt with on a tort basis. Drivers are required to pay for any property damage they cause by accidents, even in states that have no fault.
What is the difference between limited and full tort?
In three states, you can only choose limited or full tort. Pennsylvania offers guidelines for full and limited tort insurance. New Jersey allows vehicle owners to choose whether or not they want to sue. Kentucky vehicle owners have the option to opt out of the no-fault system. This can be done by submitting a form to the Kentucky Department of Insurance. You may be able to sue another driver in New York or North Dakota. However, this is not a right you have to exercise. It is available to all drivers who meet certain criteria.
You cannot choose between tort or full tort in states that all claims are settled on the tort basis. These states are called tort or at fault states. At-fault drivers must pay all damages and injuries they cause.
Tort insurance vs. no-fault insurance
States fall into two main categories when it comes to car insurance: at-fault/tort states or no-fault states. Most states use at-fault principles when it comes to car accident. You are responsible for paying the damages if you are at fault. This is often done through your car insurance policy. Only 12 states have no-fault laws. This means that each driver is responsible for their own injuries, medical bills, and other expenses following an accident.
One common misconception about no-fault states, is that every driver must pay for their own damages, including vehicle damage and rental cars, after any loss. This is false. No-fault insurance refers to personal injury protection (PIP) coverage and means that each driver uses their own PIP to pay for their injuries after an accident. You may be able to choose whether you want to sue the state for your injuries.
Tort states require at-fault drivers pay for any damages they cause. You will likely not have the option of purchasing full or limited tort in tort states. These options allow you to keep your right to sue the at-fault driver. However, in tort states you cannot lose that right. You have the right of compensation if a driver causes injury or damages.
Questions frequently asked
What is tort?
According to the Merriam-Webster dictionary, tort means “a wrongful act other than a breach of contract for which relief may be obtained in the form of damages or an injunction.” To simplify, tort, in an insurance capacity, means that the at-fault party can be held responsible for the damages or injuries they caused. You can sue the driver and their insurance company if they fail to pay for your damages.
Is full coverage equivalent to full tort?
Full coverage is not the same as full tort insurance. Full coverage includes liability coverage that covers damages to third parties, collision coverage, and comprehensive coverages that provide financial protection against vehicle damage. Full tort insurance allows you to sue for damages. In all states, full tort car insurance is not possible. Full coverage is possible regardless of where you live.
Is tort insurance available to cover pain and suffering?
You can sue for pain or suffering if you live in a state that allows you to choose between full or limited tort. You can save money on car insurance by purchasing limited tort insurance. However, you lose the right to sue for your pain and suffering.
Is full tort less expensive than limited tort?
Comparing the cost of full tort insurance vs. that of limited tort insurance shows that full tort is more costly than limited tort. Full tort insurance gives you the ability to sue the at fault party for additional expenses like pain and suffering. The coverage is usually more expensive due to the greater ability to sue.