What is a characteristic of a 'no-fault' insurance system?

In a 'no-fault' insurance system, compensation is awarded to insured individuals without the need to establish fault for an accident. This is a defining characteristic of such systems, as the primary goal is to simplify the claims process and ensure that injured parties receive timely compensation for their losses and expenses, such as medical bills and lost wages, regardless of who caused the accident. This approach helps reduce the burden on the legal system and lowers the costs associated with litigation, as insured individuals do not need to engage in lengthy court battles to prove who was at fault.

The other options do not align with the principles of a no-fault insurance system. For example, the idea that insured individuals can only sue for damages does not truly represent the concept of no-fault. In practice, while suing may be limited, it is not the sole avenue available to victims. The reference to greater recovery in court contradicts the no-fault design, which intentionally limits court involvement to streamline claims. Unlimited liability for insurers is also not a characteristic of a no-fault insurance system, as there are often caps and limits on compensation.