What does "no-fault insurance" refer to?

No-fault insurance refers specifically to a type of insurance arrangement where each party involved in an accident is responsible for covering their own damages, regardless of who is at fault. This system is designed to streamline the claims process and reduce litigation, as it minimizes the need to establish fault in an accident scenario.

In jurisdictions that employ no-fault insurance, injured parties can receive compensation for medical expenses, lost wages, and other damages directly from their own insurance company without having to pursue legal action against the other party. This approach can lead to quicker payments and less contentious legal disputes, benefiting those involved in minor accidents, where the costs of litigation may exceed the benefits of pursuing fault-based claims.

While other options present different aspects of insurance, they do not capture the essence of what no-fault insurance entails. For instance, covering all types of accidents or only property damages doesn't address the fundamental principle that characterizes no-fault systems, which is the aspect of each party bearing their own expenses irrespective of fault. Similarly, requiring proof of negligence for claims aligns more with traditional liability insurance models rather than the no-fault concept, which seeks to bypass the need for establishing fault entirely.