What defines "no-fault insurance"?

No-fault insurance is fundamentally defined by its principle of providing coverage for damages regardless of who is at fault in an accident. This means that when a policyholder is involved in a vehicular incident, their own insurance company pays for their medical expenses and other specified damages up to the policy limits, without seeking reimbursement from the at-fault party.

This system is designed to reduce the time and costs associated with litigation that can arise from determining fault after an accident. It streamlines the claims process and ensures that injured parties can receive treatment and financial assistance more quickly.

The other options do not align with the defining features of no-fault insurance. Coverage that pays only for third-party liabilities or specifies high deductibles does not capture the essence of no-fault principles, as they involve either fault determination or increased out-of-pocket expenses for the insured. Additionally, insurance that only covers the driver at fault directly contradicts the no-fault concept, as it relies on identifying blame rather than providing universal coverage for injuries sustained in an accident.