What does 'no-fault insurance' mean?

The term 'no-fault insurance' refers to a system in which each party involved in an accident has their own insurance cover their own damages, regardless of who is at fault in the incident. This approach is designed to streamline the claims process by allowing individuals to receive compensation from their own insurance companies without having to prove fault. The primary goal of no-fault insurance is to reduce litigation and simplify the handling of claims for medical expenses and lost wages directly from one's insurer. This system can help prevent disputes over fault that can prolong claims and create adversarial situations between the involved parties.

The other choices do not accurately describe the concept of no-fault insurance. Denying all claims would contradict the purpose of insurance, which is to provide financial support in times of need. Requiring driver accountability does not align with the key feature of no-fault systems, which is to bypass determining fault. Lastly, while there may be certain commercial policies that operate under separate rules, no-fault insurance primarily applies to personal auto insurance policies rather than being exclusive to commercial policies.