No-Fault Insurance
Plain English
In a no-fault state, after a car crash your own insurance pays your medical bills and some lost wages first, no matter who caused it, usually through personal injury protection (PIP). You can sue the other driver only if your injuries are serious enough to pass the state's threshold. Damage to cars is still handled by fault.
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On this page
Definition
No-fault auto insurance is a system in which each driver's own policy pays for their injuries after a crash, regardless of who caused it, usually through personal injury protection (PIP). Lawsuits against the at-fault driver are restricted unless the injury meets a threshold set by state law.
Why It Matters
Knowing whether your state is no-fault tells you where to file an injury claim first and why PIP is required there.
Real-World Example
Imagine two drivers collide in a no-fault state and both are hurt. Each files with their own insurer's PIP coverage for medical bills, regardless of fault. One driver's injuries are severe enough to pass the state's threshold, so they can also claim against the other driver's liability coverage.
Common Misconceptions
- Assuming no-fault means nobody is at fault for car damage.
- Assuming you can't sue at all in a no-fault state.
Key Takeaways
- Triple-I: "No-fault auto insurance laws require every driver to file a claim with their own insurance company after an accident, regardless of who was at fault."
- Suits are limited unless the case meets a threshold, which "may be expressed in verbal terms" or in dollar amounts, per Triple-I.
- Triple-I: "Twelve states and Puerto Rico have no-fault auto insurance laws."
- Property damage is still usually decided by fault.
Frequently Asked Questions
Which states are no-fault?
Triple-I counts twelve states and Puerto Rico, including Florida, Michigan, New Jersey, New York and Pennsylvania. Check your state insurance department.
What's it commonly confused with?
Comparative fault rules, which split blame in lawsuits.
Related Terms
Related Coverages
- Auto Insurance
Related Scenarios
Explore the rest of the Auto Insurance category.
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The factual claims on this page were checked against these sources. Rules and figures change, so check the source itself if you need to confirm the current version.
- Background on: No-fault auto insuranceInsurance Information Institute (Triple-I)
Educational information, not advice: This page is for general education only, not legal, financial, or insurance advice. Actual coverage, discounts, and requirements depend on your policy’s wording, your insurer, and the laws of your state. Confirm specifics with your own insurer or a licensed agent before making a decision. Insurpedia does not sell insurance and does not recommend specific insurers.