Is there a difference between personal no fault and personal injury protection?

Q:

Is there a difference between personal no fault and personal injury protection?

A:

The simple answer is no. They're the same coverage. But let's dive into the topic in a little bit more and talk about what no fault insurance (or personal injury protection) actually is.

The at fault vs. no fault insurance distinction comes up most commonly in automobile insurance, so that will be the context of this discussion. In conventional automobile liability insurance, when you get into an accident, the insurer of the driver who caused it (the at fault driver) is the one responsible for paying for damages, injuries, and so on for all parties involved (learn more in Auto Liability Insurance: How Much Is Enough?).

In areas with conventional liability insurance, you might have heard of a minimum requirement for liability insurance, often set at $200,000. These minimums are in place to make sure that you have enough coverage to protect other drivers on the road. You will be responsible for compensating other parties if you cause an accident, so it's important to have enough insurance to do that (find out Why You Need More Than the Statutory Minimum When You Buy Auto Insurance).

With conventional liability insurance, settling a claim requires determining legal liability, which can sometimes lead to expensive court battles. That's where no fault insurance comes in. With no fault coverage, each party's insurance company is responsible for paying their own policyholders. In other words, regardless of who caused the accident, your insurer would pay for any injuries to yourself, your passengers, and damage to your vehicle.

One important thing to note is that not every jurisdiction offers no fault insurance. Most areas in North America are still on the traditional liability model. And, even in areas that do offer it, there is often a minimum required limit of insurance.

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Written by Jacques Wong
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Jacques grew up around the insurance industry and began actively participating in 2013. Since then, he has gotten a Level 2 license, won an Insurance Council of BC award in 2015 for academic excellence in the insurance licensing courses and educates insurance professionals through PNC Learning.   Full Bio