What is the main difference between 'tort' and 'no fault' insurance systems?

The distinction between 'tort' and 'no fault' insurance systems primarily revolves around what individuals can sue for following an accident or incident. In a tort system, individuals have the ability to file lawsuits against others for damages resulting from accidents. This means that they can seek compensation for medical expenses, lost wages, pain and suffering, and other damages as determined by the court.

On the other hand, a no fault insurance system limits the right of individuals to sue others, typically allowing them to file claims with their own insurance provider regardless of who was at fault in the accident. This system is designed to provide quicker compensation to injured parties and reduce the need for litigation, which can be a lengthy and costly process.

Understanding this difference is critical for navigating insurance claims and knowing the rights and restrictions placed on individuals based on the type of insurance system in place. Other options like limits on lawsuits, benefits provided, and eligibility for coverage may vary between the two systems but do not capture the essential distinction regarding the scope of lawsuits one can pursue.