When an accident happens, there can be any range of outcomes — from limited damages to major damage and injuries. When you carry tort insurance, it ensures you can seek reimbursement for damages after an accident.
Tort insurance is an auto insurance system in which drivers can seek compensation from the other party in the case of an auto accident. It differs from a no-fault auto insurance system, a type of coverage that will pay for your medical costs and loss of income when you get into an accident, regardless of fault.
In a tort insurance system, any state with this kind of system requires drivers to have liability insurance to cover injuries the driver might cause in an auto accident.
- Any state with a tort insurance system requires drivers to have liability insurance to cover injuries the driver might cause in an auto accident.
- Full tort law allows motorists and policyholders to retain unrestricted rights to bring a lawsuit against the negligent party in an automobile accident.
- Limited tort allows drivers to save on their premiums by waiving their right to recover certain damages, such as payments for pain and suffering.
- Drivers in no-fault states must purchase liability insurance to cover their and their passengers’ bodily injuries and property damage.
What is a ‘tort’ in car insurance?
Car insurance provides protection for drivers and insurance companies. When you’re involved in an accident, your insurance coverage options kicks in. In addition to determining if you need liability, comprehensive or collision insurance, you can also opt for tort insurance.
Tort insurance allows insurers to recover costs related to injuries from the at-fault party’s insurance company. There are two types of tort car insurance: limited tort and full tort. This coverage option isn’t available in all states and it can have limitations and regulations based on the state you live in. Generally, in tort states, at-fault drivers are legally responsible for injuries caused during an accident.
What is the difference between full tort and limited tort?
Full tort law allows motorists and policyholders to retain unrestricted rights to bring a lawsuit against the negligent party in an automobile accident.
Limited tort allows drivers to save on their premiums by waiving their right to recover certain damages, such as payments for pain and suffering. Tort states require drivers to carry liability insurance to cover injuries they cause to others and for damages they cause in a crash.
Which is suggested for drivers to carry?
Since the tort system deals with injuries and not property damage, whether you choose full or limited tort insurance shouldn’t be based on if your vehicle is financed or what you drive.
If you’re injured in the accident, which tort option you carry can determine your next steps. With full tort, you maintain your right to file a pain and suffering lawsuit for injuries sustained in an accident that is someone else’s fault.
Limited tort, however, may prevent you from seeking compensation unless your injuries are found to be serious and permanent.
Experts’ recommendations: What is a tort state and what does it mean for auto insurance?
Is it safe to choose a limited tort when you are still making payments on vehicles?
Whether to go with full or limited tort is a personal decision. You may consider how likely you think you would use full tort insurance and if it is worth the increase in monthly or annual premiums. You should purchase as much insurance as you can afford.
Since tort insurance coverage focuses on personal injury protection, it doesn’t impact your financed vehicle. In general, full coverage insurance — collision and comprehensive coverage — is often required when you’re making payments on your vehicle. Within your policy, you should have some included medical and injury coverage. It’s worth discussing your coverage benefits, and how much more limited tort insurance would be, to help you make a decision that’s best for you and your pocketbook.
Keep in mind, the tort system varies from state to state, so find your state to see how your state’s tort system is set up.
Note that drivers in no-fault states (Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah) must purchase liability insurance to cover their own and their passengers’ bodily injuries and property damage.
Check out this guide: Which states are no-fault and what does it mean?
What is tort insurance vs. no-fault insurance?
It’s easy to confuse tort insurance and no-fault insurance, as they both provide accident-related medical expenses. However, there’s a clear distinction: fault.
While tort insurance focuses on recovering medical and injury costs from an at-fault driver’s insurance company, no-fault insurance provides coverage for medical and injury costs for all in the vehicle regardless of fault. No-fault insurance is also known as personal injury protection (PIP) — which helps pay for medical bills and lost wages when a driver and their passengers are injured in an accident.
Which states use tort insurance vs. no-fault insurance?
Car insurance coverage options come down to where you live. If you’re interested in tort or no-fault insurance options, you’ll need to know what your state offers.
A tort state requires at-fault drivers to pay for the other driver’s medical expenses incurred during an accident. The at-fault driver must also pay for additional damages, such as loss of wages and “pain and suffering.”
If you live in a tort state, additional car insurance coverage, such as personal injury protection and medical payments coverage, may be required. The following 38 states are tort states:
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Georgia
- Idaho
- Illinois
- Indiana
- Iowa
- Louisiana
- Maine
- Maryland
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Mexico
- North Carolina
- Ohio
- Oklahoma
- Oregon
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
States that follow no-fault law require drivers to buy personal injury protection (PIP). No matter who was at fault in an accident, insurance companies pay for their policyholder’s injuries and damage. The following 12 states and Puerto Rico have no-fault insurance and PIP requirements:
- Florida
- Hawaii
- Kansas
- Kentucky
- Massachusetts
- Michigan
- Minnesota
- New Jersey
- New York
- North Dakota
- Pennsylvania
- Utah
–Katrina Raenell has contributed to this story
Sources
- Hagelgans & Veronis. “Understanding Full Tort Vs. Limited Tort Insurance Coverage in Pennsylvania.” Accessed August 2024.
- Insurance Information Institute. “Background on: No-fault auto insurance.” Accessed August 2024.
- Nationwide. “What is no-fault insurance?” Accessed August 2024.
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