Understanding Auto Insurance: What Does 'Tort' Really Mean?

Tort insurance is a system of auto insurance that allows drivers to recover damages from other parties at fault in an accident. Thirty-eight states are tort states, meaning the at-fault driver is financially responsible for damages and injuries caused to others. The remaining 12 states, plus Washington, D.C., are “no-fault” states, where drivers must purchase personal injury protection (PIP) to cover their medical bills, regardless of who caused the accident.

Tort insurance is available in 'at-fault' states

Tort insurance is available in at-fault states for drivers who want the flexibility to pursue legal action after a car accident. In the US, 38 states follow the tort system, meaning the at-fault driver is financially responsible for any damage and injuries caused to others. In these states, drivers are not required to insure themselves and their passengers with personal injury protection (PIP) coverage. Instead, the at-fault driver's liability insurance covers the injured party's medical costs and other damages.

Tort insurance is not a separate policy but a coverage option, and its availability depends on the state. In tort states, drivers have unrestricted rights to sue the at-fault driver, and there is no limit on the compensation that can be claimed. This includes damages for pain and suffering, which refers to non-economic losses like emotional distress and physical pain.

However, it's important to note that tort insurance is more expensive than limited tort or no-fault insurance. The higher premium is due to the broader scope of protection and the unrestricted right to sue for pain and suffering. Ultimately, the decision between full tort and limited tort insurance depends on an individual's budget, risk tolerance, and the laws of their state.

The tort system is a counterpart to the no-fault system

On the other hand, no-fault states require drivers to purchase personal injury protection (PIP) insurance to cover their own medical bills and those of their passengers, regardless of who caused the accident. No-fault insurance does not cover damage to the driver's vehicle or others' property in the event of a collision. While suing in a no-fault state is generally restricted, it can be done if certain conditions are met, such as a dollar threshold or if the accident resulted in disfigurement or death.

Tort insurance is a coverage option available in at-fault states, allowing drivers to pursue legal recourse after a car accident. It is not a separate policy but is built into the liability coverage that at-fault drivers hold.

Three states—Kentucky, New Jersey, and Pennsylvania—are considered "choice" no-fault states, where drivers can choose between full tort, limited tort, or no-fault insurance. Full tort insurance allows the policyholder to sue the at-fault driver for pain and suffering without restrictions. Limited tort insurance restricts this right unless the injuries are severe, defined by the state as permanent disfigurement or serious impairment of bodily function.

Full tort insurance is more expensive

Tort insurance is available in "at-fault" states for drivers who want the flexibility to take legal action after a car accident. Thirty-eight US states follow the tort system, meaning the at-fault driver is financially responsible for any damage and injuries caused to others.

Full tort insurance allows individuals to sue an at-fault driver for medical expenses, lost income, vehicle repairs, and pain and suffering. If the at-fault party's insurance does not cover all the damages, the policyholder may have to pay out of pocket or pursue coverage under their own policy.

Limited tort insurance is available in three "choice" no-fault states: Kentucky, New Jersey, and Pennsylvania. In these states, drivers can choose between full and limited tort or no-fault insurance, which differ in cost and the policyholder's right to sue. Limited tort insurance is the default option in Kentucky and New Jersey, while full tort is the default in Pennsylvania.

When deciding between full tort and limited tort insurance, consider your budget, the number of drivers in your household, and your source of income. Full tort insurance may be worth the additional cost if you have a family to support or if you are the primary breadwinner. Limited tort insurance may be a more affordable option if you are on a tight budget or a young driver.

Limited tort insurance is cheaper

Tort insurance is a system of auto insurance that allows drivers to recover damages from other parties at fault in an accident. Thirty-eight US states are tort states, meaning the at-fault driver in an accident pays for the damage and injuries to others. The tort system is a counterpart to the no-fault system, in which drivers are required to purchase personal injury protection (PIP) insurance to cover their own medical costs and the costs for their passengers, in addition to liability coverage.

Full tort insurance is more expensive than limited tort insurance because it gives the policyholder unrestricted rights to sue the at-fault driver for pain and suffering. Full tort insurance allows you to sue the at-fault party for additional expenses, such as those resulting from pain and suffering.

Full tort insurance is worth getting if you can afford it

Tort insurance is available in at-fault states for drivers who want the flexibility to pursue legal recourse after a car accident. Thirty-eight states are tort states, meaning the at-fault driver is financially responsible for any damages and injuries caused to others. The remaining 12 states, plus Washington, D.C., are "no-fault" states, where drivers must purchase personal injury protection (PIP) insurance to cover their medical bills, regardless of who caused the accident.

Full tort insurance is more expensive than limited tort insurance, with premiums about 15% higher. However, it provides more protection in the short and long term. If you have a family to support, full tort coverage may be worth considering. If your capacity to earn a living is taken away because of an accident, you may want the ability to sue for non-medical expenses as well as injuries.

Limited tort insurance restricts your ability to sue for pain and suffering. You can only sue for pain and suffering if you have suffered a serious injury, which typically includes permanent disfigurement or an injury that prevents you from working for the rest of your life.

If money is tight or you are a young driver, limited tort insurance might be a more affordable option. If you are certain that you would never sue someone, it might not be worth paying for full tort coverage.

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