Tort Auto Insurance: Simply Explained (2024)

Since auto insurance is something that’s legally required in every state, most drivers purchase it without thinking too much about the laws behind insurance and how they operate. The majority of states operate on what is known as the ‘tort’ system of auto insurance – but ask your close friends which system your state uses and you may be met with blank stares. Below we’ll take an in-depth look at the ‘tort’ system and how it affects your auto insurance.  Continue reading to find out the answers to these questions:

• What is the tort system?  How does it relate to auto insurance?
• What are the tort laws in your state? Does your state operate under the tort system?
• What are the advantages and disadvantages of the tort system?

What Is The Tort System?

First – what is the ‘tort’ system? In short, if your state uses the ‘tort’ system when an automobile accident occurs one of the parties involved will be determined to be the party that caused the accident, and this person is labeled the ‘at fault’ party. It is this party and their auto insurance that will be subject to paying the victims’ accident-related medical treatment and property damage costs, and in many states, this party will be open to lawsuits for damages as well; this is why it’s referred to as the ‘tort’ system.

Let’s see how other places define the “tort” system in regards to auto insurance.

Rocky Mountain Insurance Information Association –

This is a system where the driver who is at fault for causing a traffic crash is responsible for paying the victim’s medical expenses and compensating for additional damages, such as loss of wages and “pain and suffering.”

Automobile.com –

The traditional tort is designed to pay for the medical expenses of another party in the event of an accident caused by the policy holder. The insurance does not pay for the medical expenses of the policy holder. The process of proving that an accident occurred, the policy holder was at fault and the medical expenses came from the accident is the responsibility of the party making a claim.

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Tort Laws And Your State

38 states operate under the ‘tort’ system; the other 12 states operate under what is referred to as ‘no-fault’ insurance. The main difference in the way these two systems operate is that under ‘no fault’, in most instances a party will still be determined to have caused the crash but their insurance won’t pay out for injury claims. Under ‘no-fault’ insurance, drivers purchase their own insurance – usually called Personal Injury Protection or “PIP” coverage – which pays their medical treatment, rehabilitation, lost wages, and other expenses, as well as those of any passengers who happen to be in the vehicle.

The 38 states currently operating under the tort system are: Alabama, Alaska, Arizona, Arkansas,California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont,Virginia, Washington, West Virginia, Wisconsin, and Wyoming. Check out auto insurance information in your state here.

To complicate things a bit further, in almost all ‘tort’ states there are two different options – ‘full tort’ and ‘limited tort’. Some states allow drivers to choose which system they want to use, while other states simply mandate a certain option for all drivers. Under ‘full tort’, if you are injured in a crash that isn’t your fault, you have an unrestricted right to sue the person who caused the accident. Under a ‘limited tort’ system, your ability to sue the person that caused an accident is virtually non-existent; courts will only award additional damages above the injury and property damage claims when the injuries sustained are very serious. Of course, as the laws tend to vary from state to state, “serious” can mean anything from a broken limb to a fatality. With the most common injuries in automobile accidents being muscle and tissue related, such as whiplash, it can be very difficult to win additional damaged in a ‘limited tort’ state. Again, if you are unsure which system you are operating under, it’s worth a quick call to your insurer or your state’s insurance office.

Read more: Does auto insurance cover whiplash symptoms?

Tort Or No Tort? That Is The Question

As to which system is better – it’s been a matter of debate in many state legislatures for decades, with few coming to any decisions other than to stick with the status quo or to switch to the other system. While it would seem that the ‘tort’ system is better, since ‘tort’ states outnumber ‘no fault’ states 38-12, proponents of ‘no fault’ claim that their overall auto insurance costs are lower and that a number of stresses are relieved from not having to worry if the other party has enough insurance to cover your costs. This is true, but with insurance companies in most ‘tort’ states offering drivers the ability to purchase policies like PIP or Uninsured Motorist Protection it’s mostly a moot issue. It’s somewhat rare to see a state switch systems, so don’t expect your auto insurance laws to change anytime soon.

If you live in a state that operates their auto insurance laws under the ‘tort’ system, you’re stuck with it. As mentioned above, the jury is still out on whether or not ‘tort’ is any better than ‘no fault’ when it comes to the auto insurance needs of an entire population; it’s simply one way of doing things that have been relatively easy to implement and clone from state to state. Rather than stressing about the ‘tort’ system, it’s best to take full advantage of any auto insurance policies that provide additional protection and to ensure that you have purchased as much coverage as you can afford. Stay away from simply picking up your state’s mandatory minimum – if you end up causing a serious accident, you could be on the hook for thousands of dollars of expenses. Raise your coverage to a level that you feel safe and you probably won’t have much to worry about!

Additional Resources Regarding The Tort System

• Wikipedia.org – Tort Article
• RMIIA – Tort Auto Insurance Basics

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