How does a "no-fault" auto insurance system work?

In a "no-fault" auto insurance system, each party is responsible for covering their own damages resulting from an accident, regardless of who was at fault. This approach is designed to streamline the claims process and reduce the need for lengthy litigation associated with determining fault after an accident. By not assigning blame in the immediate aftermath, the system allows for faster compensation for medical expenses and vehicle repairs, facilitating quicker recovery for those involved.

The core principle is to minimize disputes over fault, which can often delay or complicate the claims process. This system is particularly beneficial in accidents with minor injuries or damages, as it simplifies recovery for both drivers and insurance providers. It encourages individuals to rely on their own insurance coverage rather than seeking compensation from the other party's insurance, thus reducing the overall burden on the legal system.

In contrast, the other choices describe different scenarios or insurance structures that do not align with the fundamental principles of a no-fault system.