In the United States, there are two kinds of auto insurance systems. Most states have adopted a fault-based insurance model. Under a fault-based system, you must bring a claim against the driver who caused the accident to get compensation for your injuries.
Several states have opted instead for what’s called a “no-fault” model. In a no-fault state, you look first to your own auto insurance to pay at least some of your auto accident expenses, even if the wreck was your fault. In more serious cases, you might be allowed to bring a claim against the driver who’s responsible for your injuries.
We’ll explain what “no-fault” means, walk you through the basics of no-fault insurance, and discuss when you can bring a claim or a lawsuit against a careless driver.
What Does “No-Fault” Mean?
The term “no-fault” simply means that after a car accident, you’re paid compensation for your injuries (what the law calls “damages”) without considering whose fault (“negligence”) caused the collision. Fault, in other words, doesn’t matter when you make a no-fault insurance claim.
Compare Traditional Fault-Based Insurance
To see why no-fault is such a big deal, compare it to a traditional, fault-based insurance system. In a fault-based state, to collect damages for your injuries you must bring a claim (called a “third-party claim”) against the other driver and prove that their negligence caused the wreck. Proving negligence can be expensive and time-consuming, often taking months, sometimes more than a year.
No-Fault Is Usually Quick and Easy
Because there’s no need to fight over who was at fault, a no-fault claim is usually quick and easy. No-fault states typically require payment of benefits very quickly. Kansas law, for example, says benefits must be paid within 30 days after proof of a covered loss. And if you’re unable to work after a Kansas auto accident, your no-fault insurer must pay you disability benefits every two weeks. (Kan. Stat. § 40-3110(b) (2023).)
No-Fault Car Insurance Basics
There are two distinguishing features of a no-fault insurance system.
- You must buy no-fault insurance. If you’re hurt in an accident, you look first to this insurance to pay covered benefits.
- Your right to sue for damages is limited. You can’t bring an insurance claim or a lawsuit against a negligent driver unless your personal injuries are serious.
No-Fault Insurance
When you live in a no-fault state, you’re required to buy no-fault insurance. It’s usually called “personal injury protection” (PIP) coverage. PIP puts the “no-fault” in no-fault insurance, because PIP pays your benefits if you’re hurt in an accident.
What Does PIP Cover?
If you’re hurt in a wreck, PIP covers your out-of-pocket expenses—the law calls them ”economic” damages—regardless of who was at fault for the accident. The specifics vary, of course, from one state to the next. But in most states, PIP will reimburse you, your passengers, and possibly others (like injured pedestrians or bicyclists, or surviving family members in case of your death), up to the limit of your coverage, for all or part of your:
- hospital, medical, and rehabilitation costs
- lost wages (sometimes called “disability income”)
- replacement services for things like house cleaning and yard work that you’re unable to do
- survivors' losses, and
- funeral and burial expenses.
What PIP Doesn’t Cover
Just as important as what PIP pays is what it doesn’t pay.
No Property Damage Coverage
With the exception of Delaware (see Del. Code tit. 21, § 2118(a) (2023)), PIP doesn’t cover property damages. If your car or other property was damaged and you want to recoup your repair or replacement costs, you must:
- file an insurance claim under your own collision coverage, if you have it, or
- bring a claim against the responsible driver’s auto liability coverage.
No-fault laws don’t restrict your ability to bring a claim against an at-fault driver to recover your property damage.
No Noneconomic Damages
There’s a tradeoff for no-fault payment of your economic losses: PIP doesn’t pay for what the law calls “noneconomic” damages. Designed to compensate you for injuries like pain and suffering, emotional distress, lost enjoyment of life, and other intangible harms, noneconomic damages can be the largest item of damage in moderate or severe car wreck cases.
If you want to collect noneconomic damages, you must bring a claim against the driver who’s responsible for your injuries. But as we’ll see below, no-fault laws limit your right to bring such a third-party claim.
No-Fault States
Twelve states have some form of no-fault insurance system. Most are “mandatory” no-fault states, meaning that no-fault is the only auto insurance game in town, so to speak. A handful of states are “choice” states, where drivers can opt into (or out of) the state’s no-fault system.
No Fault States and PIP Benefits
This table identifies each no-fault state, indicates whether it’s a mandatory (M) or choice (C) state, and gives basic information about the state’s PIP benefits.
|
State |
M/C |
Required PIP Benefits |
|
Florida |
M |
Fla. Stat. § 627.736 (2023) |
|
Hawaii |
M |
|
|
Kansas |
M |
Kan. Stat. § 40-3103 (2023) |
|
Kentucky |
C |
Ky. Rev. Stat. § 304.39-020 (2023) |
|
Massachusetts |
M |
|
|
Michigan |
M |
Mich. Comp. Laws §§ 500.3107(1), 500.3107c(1) (2023) |
|
Minnesota |
M |
Minn. Stat. § 65B.44 (2023) |
|
New Jersey |
C |
N.J. Stat. § 39:6A-4.3 (2023) |
|
New York |
M |
N.Y. Ins. Law § 5102 (2023) |
|
North Dakota |
M |
N.D. Cent. Code § 26.1-41-01 (2023) |
|
Pennsylvania |
C |
75 Pa. Cons. Stat. § 1711(a) (2023) |
|
Utah |
M |
Utah Code § 31A-22-307 (2023) |
Limited Right to Sue
If you’ve got unreimbursed economic losses or you want to recover damages for your noneconomic injuries, you’ll have to bring an insurance claim or a lawsuit against the responsible driver. The rules for bringing third-party claims vary from state to state, so be sure to check your state law.
In every no-fault state, to bring a claim for pain and suffering, emotional distress, or other noneconomic losses, you must prove that your injuries exceed your state’s “tort” threshold. States have one or both of these thresholds:
- a dollar amount threshold, allowing you to sue if your medical expenses exceed a specified dollar amount, and
- a descriptive threshold that allows you to sue for certain kinds of injuries.
In states that have both thresholds, you need only meet one or the other—not both.
The Dollar Amount Threshold
In just over half of all no-fault states, you can bring a third-party insurance claim or lawsuit if your out-of-pocket medical expenses exceed a specified amount, typically between $1,000 and $4,000. In Kansas, for instance, the dollar threshold is $2,000. (Kan. Stat. § 40-3117 (2023).) Utah’s threshold is $3,000. (Utah Code § 31A-22-309(1)(a) (2023).)
The Descriptive Threshold
Some states use a descriptive threshold in addition to, or in lieu of, a dollar threshold. In order to bring a claim or lawsuit against a negligent driver in one of these states, you must have at least one of the described injuries. Typically, broken bones, permanent injury or disfigurement, loss of a body part or function, or injuries causing death are necessary.
Florida’s descriptive threshold, for example, includes injuries causing:
- significant, permanent loss of “an important bodily function”
- permanent injury
- significant, permanent “scarring or disfigurement,” or
- death.
(Fla. Stat. § 627.737(2) (2023).)
State Tort Thresholds
This table lists each state’s tort thresholds.
|
State |
Dollar Threshold |
Descriptive Threshold |
|
Florida |
N/A |
Fla. Stat. § 627.737(2) (2023) |
|
Hawaii |
$5,000, or |
|
|
Kansas |
$2,000, or |
Kan. Stat. § 40-3117 (2023) |
|
Kentucky |
>$1,000, or |
|
|
Massachusetts |
>$2,000, or |
|
|
Michigan |
N/A |
|
|
Minnesota |
>$4,000, or |
Minn. Stat. § 65B.51 (2023) |
|
New Jersey |
N/A |
N.J. Stat. § 39:6A-8 (2024) |
|
New York |
N/A |
|
|
North Dakota |
> $2,500, or |
N.D. Cent. Code §§ 26.1-41-01.21, 26.1-41-08.1 (2023) |
|
Pennsylvania |
N/A |
|
|
Utah |
> $3,000, or |
Utah Code § 31A-22-309(1)(a) (2023) |
Get Help With Your No-Fault Claim
If you have a simple no-fault claim and there are no complicating factors (for example, your insurer isn’t denying liability), you might be able to resolve it on your own. But if you’re thinking of bringing a third-party insurance claim or a lawsuit against an at-fault driver, things can go from simple to complicated very quickly. You’ll want to have experienced legal help on your side.
Here’s how to find a no-fault lawyer near you who’s right for you and your case.