States With No-Fault Insurance Laws
In 12 states, drivers file accident claims for their injuries with their own insurers — regardless of who caused an accident.
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A no-fault state is one in which drivers must file claims with their own insurance companies to receive coverage for their own injuries, no matter which party actually caused the accident.
That means if someone runs a stop sign and crashes into your passenger side door, your insurance company — not the other driver’s — will cover your medical costs for whiplash or a broken hand. However, the at-fault driver’s insurance will still be responsible for your property damage.
In a fault, or tort, system, at-fault drivers cover the other party’s injuries and damages and can face lawsuits for expenses. No-fault laws aim to speed up the claims process and reduce lawsuits that don’t meet certain conditions or monetary thresholds.1 Only 12 states and Puerto Rico use no-fault systems.
Because no-fault insurance laws can boost rates in a state, it’s important to compare car insurance rates from multiple companies to find the most affordable coverage. Here’s what you should know about no-fault insurance laws.
Quick Facts
Drivers in no-fault states pay an average of 13% more for car insurance than policyholders in at-fault states, according to Insurify’s database of more than 90 million car insurance quotes.
In true no-fault states, drivers must carry personal injury protection (PIP) coverage.
Three of the 12 no-fault states — Kentucky, New Jersey, and Pennsylvania — give drivers the ability to opt out of the system by purchasing additional coverages.
What is no-fault car insurance?
No-fault insurance refers to a system where each driver’s own insurance company pays for certain losses for its policyholders, regardless of who caused an accident. States opt into no-fault systems in an attempt to reduce the overall cost of car insurance by cutting down on small claims litigation and compensation delays — although that isn’t always the result.
In true no-fault states, personal injury protection (PIP) coverage is mandatory. PIP compensates the policyholder for medical bills, lost wages, funeral expenses, and other out-of-pocket costs associated with an accident.
No-fault insurance states
The following 12 states currently mandate no-fault insurance. Required coverage levels vary by state.
How no-fault insurance differs from tort insurance
Insurers pay claims for their own policyholders in no-fault states, but the reverse is true for at-fault (or tort) states. In these systems, the at-fault driver’s insurance company compensates for costs related to the other party’s injuries and vehicle damage. So, if you’re not responsible for a crash, the other driver’s insurance should cover your costs.2
Apart from the difference in responsibilities for medical costs in at-fault versus no-fault states, legal implications also apply.
If you live in an at-fault state and get injured in a covered incident, you can generally sue the other driver. The 12 no-fault states limit the ability to sue, but drivers still can if their case meets certain conditions, known as the tort liability threshold. And in 10 additional states and Washington, D.C., you can have PIP coverage and no restrictions on lawsuits.
Good to Know
Despite recent tort reform in Florida, the state is still experiencing an average of more than 30,000 no-fault lawsuits being filed per month, according to the Insurance Information Institute.
How no-fault insurance works
The no-fault system can help reduce lawsuits and streamline the payout process after an accident. In a no-fault state, drivers must carry PIP insurance, which covers medical expenses after a crash, regardless of who’s responsible.
So, if both parties sustain injuries in a car accident, each driver’s own PIP coverage will pay for their healthcare costs, regardless of fault. It’s important to note that insurance premiums in no-fault states can be higher than those in at-fault states, as drivers may need to purchase more coverage.
How tort insurance works
Tort insurance exists in two common types: limited and full. Limited tort insurance, an option in the three “choice no-fault” states, restricts your ability to sue an at-fault driver after a car accident. For instance, you can sue for reimbursement of medical costs but not for pain and suffering.
The rules vary by state though, so it’s important to understand your state’s requirements when considering litigation.
No-fault insurance requirements
Find the minimum insurance required in each no-fault state in the table below, sourced from state government websites and the Insurance Information Institute. Minimum insurance may include bodily injury (BI) and property damage (PD) liability, personal injury protection (PIP) coverage, and uninsured or underinsured motorist coverage (UM/UIM).
States with optional PIP coverage
Certain states offer optional PIP coverage without being considered true no-fault states. In these states, drivers not at fault can sue at-fault drivers for damages without needing to meet a specific monetary or verbal threshold. States (and one district) with optional PIP coverage include the following:
'Choice no-fault' states
Three U.S. states operate as choice no-fault states that use a full or limited tort system. In these states, specifics regarding coverage requirements and your ability to sue an at-fault driver become more complicated.
Important Information
No lawsuit restrictions exist under full tort insurance. You can bring suit against the responsible party and potentially get compensation for both medical costs and pain and suffering.
How fault and damages work in no-fault states
Drivers can still be responsible for a crash in a no-fault system. Fault is still determined in no-fault states, even though insurance works differently than it does in at-fault states.
Determining fault
The process of determining who’s at fault in an accident doesn’t change, whether you live in an at-fault or no-fault state. In general, the process involves the following steps:
The police will ask both drivers questions at the scene and compile a police report.
Each driver will contact their insurance company and explain the incident in detail, and the insurer will request and review the police reports.
Both drivers’ insurance companies will communicate and determine fault based on the police reports and each driver’s statements.
Who pays for damages?
While your personal injury protection insurance will cover your own medical costs in a no-fault state, the at-fault driver may still be liable for other costs, like damage to your vehicle. In this case, their property damage liability insurance would help pay for your car repairs.
No-fault claims
In a no-fault state, each driver must submit a claim with their insurer, even if one driver clearly caused the crash. Your PIP coverage should kick in if you get injured in an accident.
For instance, if another driver hits your car and you dislocate your shoulder, your PIP coverage can pay for your medical bills, as well as lost wages or funeral costs. It won’t cover the other driver’s medical expenses.
The claims process can vary depending on your insurance company, but in general, the following steps take place:
You’ll collect the other driver’s information, including their license and registration.
The police may file a report that describes the scene of the accident and includes both drivers’ information.
You and the other driver will contact your respective insurance companies and explain what happened.
Your insurance company and the other driver’s insurance company may disburse up to the total of your PIP coverage to pay for medical expenses.
Both insurance companies will obtain copies of the police report, review your descriptions, and determine who’s at fault. If the other driver is at fault, their property damage liability coverage should compensate you for damage to your vehicle.
Property damage claims
Property damage liability can cover damage to your vehicle if another driver is found at fault in an accident. For instance, if another driver runs a red light and hits your passenger door, that damage may be covered by their property damage liability insurance.
Insurance costs in no-fault vs. at-fault states
In theory, no-fault laws should reduce the cost of insurance by reducing the number of lawsuits and simplifying claims processing after accidents, but the system has some drawbacks. Drivers in no-fault states pay a monthly average of $156 for car insurance, which is 13% more than the at-fault cost of $138.
Part of the reason for this price discrepancy is that insurers in no-fault states pay PIP claims regardless of fault, motivating some unscrupulous drivers, medical professionals, and lawyers to exaggerate the severity of injuries and costs of medical bills. Insurance fraud increases the total cost of claims, which policyholders then pay for through higher premiums.
In a high-profile 2022 case, investigators uncovered a massive no-fault auto insurance scheme spanning New York and New Jersey. Jelani Wray and co-conspirators, including bribed hospital workers, 911 operators, and police officers, exploited the no-fault system to defraud insurance companies of millions of dollars in false medical reimbursement claims.6 Staged accidents are also very common in no-fault states, Triple-I says.
You can see the unintended consequences of no-fault laws reflected in the total average monthly car insurance quotes for at-fault versus no-fault states.
Disclaimer: Table data sourced from real-time quotes from Insurify's 500+ partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
Shopping for affordable insurance in a no-fault state
Whether you live in a no-fault or at-fault state, comparing policies from different insurers is the best way to find affordable coverage. Consider using a reputable car insurance comparison tool to simplify the process and save time.
No-fault states FAQs
Here are answers to some commonly asked questions about no-fault insurance.
When can you sue with no-fault insurance?
While no-fault insurance was designed in part to reduce the number of civil lawsuits occurring after accidents, you can still sue with no-fault insurance in certain cases. For instance, you may be able to sue if your medical bills exceed a certain monetary or verbal threshold. Review the requirements in your state, and speak with your insurance company if you’re considering litigation.
If you have health insurance, do you need PIP insurance?
You may still need personal injury protection, sometimes called no-fault coverage, if you have medical insurance. Certain states mandate that you carry a specific amount of PIP coverage to meet insurance requirements.
What makes a state qualify as a no-fault state?
In no-fault states, drivers must purchase a set amount of personal injury protection insurance. If you’re in an accident in a no-fault state, you may not be able to sue the at-fault driver unless your medical bills exceed a certain threshold.
What happens if you’re out of state and have an accident in a no-fault state?
If you live in an at-fault (or tort) state and have your state’s required insurance coverage, you may be able to claim no-fault benefits if you’re involved in an accident in a no-fault state. Contact your insurance company or insurance agent to discuss your options, as specifics vary by auto insurer.
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