no-fault insurance

no-fault insurance type of indemnity plan, usually applied to automobile coverage, in which those injured in an accident receive direct payment from the company with which they themselves are insured. Originated (1947) in Saskatchewan, Canada, no-fault insurance eliminates the need for accident victims to establish another's liability, or fault, through a civil lawsuit. Lawyers' groups oppose no-fault, saying that it limits the citizen's right to sue. Supporters say that it leads to quicker settlement of accident claims and lower premium rates than the traditional tort liability system because it reduces legal fees and court costs. The first comprehensive no-fault plan in the United States was adopted (1971) in Massachusetts. Currently 13 states have no-fault auto insurance laws that in some way restrict the right of parties to file legal suits. Provisions defining when a person can sue in no-fault states vary, but motorists can generally sue for severe injuries. Recently, however, rising insurance costs have led some states to reexamine the effectiveness of no-fault insurance laws.

no-fault • adj. not assigning fault or blame, in particular: ∎  denoting an insurance policy that is valid regardless of whether the policyholder was at fault: no-fault automobile insurance. ∎  denoting an insurance or compensation plan (esp. one covering medical or industrial accidents) whereby a claimant need not legally prove negligence against any party. ∎  of or denoting a form of divorce granted without requiring one party to prove that the other is to blame for the breakdown of the marriage.