Factors that vary auto insurance laws by state
Auto laws vary in different states primarily depending on the category they fall into. With regards to automobile insurance, all the 50 states in America are technically categorized as:
- Tort states
- No-fault states
- Add-on states
Tort States (What are Fault States?)
States, in which, if you get involved in an accident, you or the other party may be identified to be at fault are known as Tort states. In such a case, you can file a suit against the other party to pay for the loss that you have incurred and vice versa. Again the regulations in Tort states may vary from one state to another.
States, in which, if you get involved in an auto accident, your insurance company will pay you up to the policy limits for the damages your car has suffered regardless of who was responsible are called no-fault states. Under regulations in such a state, you can neither blame the other party in an accident nor can you file any suit against the other party for compensation and vice versa. You can seek compensation only from your own insurance company. However, after your insurance company has paid you your money, if they believe that the other driver was at fault and must compensate for the loss, then they can pursue the other party's insurance provider for compensating the loss. This holds good for the other party too.
States wherein you get compensated for accidental damages from your own insurance company, but face no restrictions regarding lawsuits are referred to as Add-on States.