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Sometimes, reading insurance terminology can feel like trying to decode a lost language—“tort” is just one of many terms that are fairly common in the world of insurance but much rarer in most people’s day-to-day life. But it’s important to understand the language being used in your insurance policy, so you can be confident in the coverage you have, and prepared for when you need it. The good news is that “tort” isn’t a word exclusive to the insurance world—it is also a fundamental legal concept, and by looking at the basics of tort law, we can more easily gain an understanding of what a tort is in insurance.
In a broad sense, a tort is an act of civil harm—causing someone else physical, emotional, psychological, or financial damage through your own action (or lack thereof), whether recklessly or with malicious intent. There are many different kinds of torts, including assault, product liability, slander, and much more. However, one of the easiest examples to help us understand torts is conveniently also the most likely to be relevant to your insurance: auto accidents.
Car accidents are a classic example of a tort. With few exceptions, road collisions aren’t a natural, immutable event. Whether somebody intentionally hit another vehicle or just failed to check their blind spot before getting over, most accidents are the direct or indirect result of drivers’ choices.
Put simply, tort insurance is the area of insurance which deals with torts. In other words, tort insurance covers the damage you cause to another person in a tort—there are a few types of liability insurance which may do this, but when people use the term “tort insurance,” they are generally referring to auto liability insurance, as it is by far the most common.
However, there are actually two primary types of tort insurance systems: full tort vs. limited tort.
In most cases, the tort insurance system you should expect to apply to you will depend on whether you live in an at-fault vs. a no-fault state. However, it’s important to understand both in the event of an accident, as the other driver’s tort insurance type may impact the claims process and your total compensation. This becomes especially true in choice no-fault states, such as New Jersey, Pennsylvania, or Kentucky, where drivers may choose to use either type of tort insurance system.
Full tort insurance is a system that generally applies to at-fault states, including Oregon, Ohio, and many other U.S. states. In a full tort system, accident victims can freely sue the at-fault driver for injury and damages, including damages which don’t have a tangible monetary value (noneconomic damages), such as pain and suffering or loss of companionship. In other words, a full tort system makes it easier to sue for the full amount of damages sustained.
Limited tort insurance is a system that generally applies to no-fault states, including Florida, New York, and a few other U.S. states. In no-fault states, including the three choice no-fault states, personal injury protection (PIP) insurance is generally required, meaning the financial losses you incur as a result of your car accident injuries can be compensated through your own insurance. However, there are stricter limitations on pursuing further compensation through the at-fault party’s insurance. Specifically, the noneconomic damages supported by a full tort system only become available if your injuries are deemed serious.
As a general rule, most no-fault states tend to have higher insurance premiums than at-fault states, due to the additional requirement for PIP. However, in choice no-fault states, where PIP tends to be required regardless of which type of tort insurance you choose, a limited tort system can be the cheaper option—at the cost of less comprehensive accident protection.
If you’ve recently been in a car accident and have questions about how insurance affects your potential compensation, don’t hesitate to get in touch with an auto accident lawyer at Senft Legal. We have decades of experience to help you find the answers to your coverage questions, from the basic fundamentals of insurance to niche or complex scenarios. Best of all, your consultation is 100% free, meaning you can seek clarity without financial concern. We’re here to help—contact us 24/7 to take control of your recovery journey.