What happens when an insured driver is at fault in a no-fault insurance system?

In a no-fault insurance system, the principle is structured so that each party's own insurance company covers their medical expenses and damages, regardless of who was at fault in the accident. This approach is designed to streamline the claims process, reduce litigation, and ensure that injured parties receive timely compensation for their losses without the need to establish fault.

By focusing on covering the insured's own expenses, the system alleviates the burden of proving fault, which can often lead to long and contentious disputes. Therefore, the correct answer highlights that the insured driver's own insurance is responsible for their expenses, emphasizing the core concept of no-fault insurance.

The other choices do not align with the fundamental mechanics of a no-fault insurance system. For example, immediate premium increases would typically occur in fault-based systems or as a consequence of certain infractions, rather than being a guaranteed result of filing a claim in a no-fault context. Similarly, the assertion that the insurance company pays for both parties' damages suggests a shared liability, which contradicts the purpose of the no-fault framework. Lastly, the possibility of a driver's license being suspended is not a standard consequence in no-fault systems unless specific violations occur, such as driving without insurance.