No-fault insurance is a type of auto insurance system where each party involved in an accident receives compensation for their own injuries and damages, regardless of who was at fault for the accident. The key purpose of this system is to reduce the number of disputes and lawsuits arising from accidents, as it allows individuals to cover their medical expenses and other losses through their own insurance, without needing to prove fault.
Among the options provided, the statement that aligns most closely with the concept of no-fault insurance is: Unlimited PIP (Personal Injury Protection) mandated by the states to reduce the number of small and frivolous lawsuits.
No-fault insurance often includes PIP coverage, which typically covers medical expenses and, in some cases, lost wages, without regard to who caused the accident.