no-fault insurance: No-fault insurance is designed to pay for the financial losses associated with minor accidents as quickly as possible. Under a no-fault system, which varies from state to state, your own insurance company will pay medical expenses and lost wages caused by an accident, regardless of who was at fault. In the long run, this system is designed to save time and money that would otherwise be spent litigating petty claims. Usually, that means less expensive auto insurance. In exchange, no-fault systems limit the right to sue under certain circumstances. Not every state has a no-fault system and they vary from state to state. In Michigan, there is no limit to the amount that you can collect under no-fault. In other states, you may only be able to collect $5,000. Once no-fault runs out, motorists can turn to their uninsured motorist/underinsured motorist coverage to make up the difference.
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