What are the two types of no-fault systems?

The concept of no-fault systems in insurance primarily revolves around how claims for car accidents are handled without the need for determining fault. The two prominent types of no-fault systems are indeed pure and modified.

In a pure no-fault system, victims of an accident can collect damages from their own insurance companies regardless of who caused the accident. This means that regardless of fault, individuals can receive compensation for medical expenses, lost wages, and other damages, enhancing the speed and efficiency of claims processing and reducing litigation.

On the other hand, a modified no-fault system allows individuals to file claims with their own insurance first, but it also permits them to pursue the at-fault driver for additional damages if certain thresholds are not met. These thresholds can be based on the severity of injuries or monetary damages. This setup balances the benefits of quick compensation while still preserving the right to seek more comprehensive damages when serious injuries occur.

In this context, the other answer options do not accurately capture the established classifications within no-fault systems. Terms like "complete and partial" or "basic and extended" do not relate to the no-fault insurance framework, thereby clarifying why pure and modified is the correct categorization of no-fault systems.