What is the basic principle of a "no-fault" insurance system?

The basic principle of a "no-fault" insurance system is that each party involved in an accident has their own insurance coverage that pays for their own losses, regardless of who is at fault for the accident. This approach is designed to expedite the claims process and reduce the need for litigation by eliminating the requirement to prove fault before receiving compensation for medical expenses and other damages.

In a no-fault system, individuals typically have their medical bills and lost wages covered by their own insurance policies while they recover, allowing them to receive benefits quickly. This system aims to streamline the process of settling claims and reduce costs associated with personal injury lawsuits.

In contrast, the other options misinterpret the structure and intent of no-fault insurance. The first option suggests that coverage is contingent on not being at fault, which contradicts the essence of no-fault systems. The third option implies that only one insurance company would be responsible for paying damages, which doesn't reflect the parallel coverage provided by each party's insurer. Lastly, the fourth option incorrectly limits the application of no-fault insurance to minor accidents, while in reality, it can apply to a wide range of motor vehicle incidents.