Which type of insurance guarantees that each party pays for their own damages in an accident?

No-fault insurance is designed specifically to ensure that each party involved in an accident is responsible for covering their own damages, regardless of who is at fault. This type of insurance streamlines the process of handling claims and helps prevent lengthy legal battles over liability. In a no-fault system, policyholders typically file claims with their own insurance company to receive compensation for medical expenses and other related costs. This is particularly beneficial in reducing the burden on the court system and facilitates quicker access to necessary benefits for injured parties.

The other options do not serve this purpose. General liability insurance generally protects against claims of bodily injury and property damage made by third parties, property insurance is focused on protecting one's own property from various perils, and comprehensive insurance typically covers damage to a vehicle caused by events other than collisions, such as theft or natural disasters. Thus, no-fault insurance uniquely aligns with the principle of each party bearing their own costs in the event of an accident.