Which term describes an insurance system that minimizes litigation between parties in an accident?

No-fault insurance is designed to minimize litigation between parties involved in an accident by allowing each party to recover damages for their injuries without needing to prove fault. This system streamlines the claims process, as individuals can seek compensation directly from their own insurance policy, regardless of who caused the accident.

This approach reduces the amount of disputes that often arise in traditional liability insurance scenarios, where proving fault is necessary and can lead to lengthy legal battles. In a no-fault system, the emphasis is on providing swift medical and other benefits to those injured rather than determining liability, which helps maintain relationships between drivers and supports quicker resolutions to claims.

In contrast, managed care typically relates to the organization of healthcare services, while excess coverage refers to insurance that covers costs that exceed the limits of a primary policy. Liability insurance, while crucial for protecting against claims resulting from one’s actions, often still involves litigation to determine fault and compensation.