The 12 states that have no-fault insurance laws are: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah. Drivers can opt out of a no-fault policy in Kentucky, New Jersey, and Pennsylvania.
Drivers in the 12 no-fault states can’t rely on the other drivers' car insurance coverage to pay for their injuries after an accident, even if the other driver was at fault. Instead, they're required to have personal injury protection, sometimes referred to as "no-fault insurance," which covers their own injuries after a crash. However, no matter where you live, the at-fault driver still has to pay for the property damage they cause, even in no-fault states.
What is a no-fault state?
A no-fault state is a state that requires drivers to have a minimum amount of personal injury protection (PIP) coverage, usually in addition to bodily injury and property damage liability coverage. After an accident, drivers in a no-fault state must file a claim with their own insurance company for the costs of their injuries, no matter who was actually responsible for the crash.
In no-fault states, the right of drivers to sue for their medical injuries is limited. Injured drivers may only be able to sue if their injuries are considered severe. At-fault states have different ways of defining severity, but generally you can only sue if your injuries or your medical bills meet certain thresholds.
While you use your personal injury protection to pay for your own medical bills in a no-fault state, the other driver is still responsible for paying for damage to your car, assuming they caused the accident. In both no-fault and at-fault states, drivers have to carry a minimum amount of property damage liability coverage.
No-fault car insurance vs. at-fault insurance
No-fault car insurance is different from at-fault insurance. In an at-fault state, the driver who caused the accident pays for the injuries and property damage of the other. This is also called a tort liability insurance system, and it means that in these states, you can make a claim with the at-fault driver's insurance to cover the cost of your medical bills and injuries.
Claims tend to take longer in at-fault states than in no-fault ones. This is because insurers have to determine fault after an accident in order to know which driver’s insurance company is responsible for paying for the other's injuries.
No-fault insurance states
There are 12 no-fault insurance states where drivers have to have personal injury protection (and have a limited right to sue the other driver after a crash).
Just like in the 38 at-fault, or “tort” liability states, drivers in no-fault states usually have to get a minimum amount of third party liability coverage and uninsured motorist protection, in addition to PIP.
$10,000 property damage liability (PDL), $10,000 PIP
$20,000/$40,000 bodily injury liability (BIL), $10,000 PDL, $10,000 PIP
$25,000/$50,000 BIL, $25,000 PDL, $25,000/$50,000 uninsured/underinsured motorist coverage (UM/UIM), $4,500 PIP
$25,000/$50,000 BIL, $25,000 PDL, $10,000 PIP
$20,000/$40,000 BIL, $5,000 PDL, $20,000/$40,000 UM/UIM, $8,000 PIP
$50,000/$100,000 BIL, $10,000 PDL (outside Michigan), $1 million PDL (inside Michigan), $50,000-$250,000 PIP
$30,000/$60,000 BIL, $10,000 PDL, $25,000/$50,000 UM/UIM, $40,000 PIP
$5,000 PDL, $15,000 PIP (basic coverage option)
$25,000/$50,000 BIL, $10,000 PDL, $25,000/$50,000 UM/UIM, $50,000 PIP
$25,000/$50,000 BIL, $25,000 PDL, $25,000/$50,000 UM/UIM, $30,000 PIP
$15,000/$30,000 BIL, $5,000 PDL, $5,000 medical benefits
$25,000/$65,000 BIL, $15,000 PDL, $3,000 PIP
Choice no-fault insurance states
Three of the 12 no-fault states allow drivers to choose between the limited tort restrictions of no-fault insurance and full tort liability (meaning there are no limits on your ability to sue). For this reason, these states are called choice no-fault states.
In these states, you can expand your right to sue — your injuries and medical costs wouldn't need to reach a certain threshold beforehand. Keep in mind, however, that your auto insurance premiums will be more expensive if you switch to a full-tort policy. Also, you would lose your access to PIP coverage if you expanded your right to sue in Kentucky.
Add-on no-fault insurance states
Along with the 12 no-fault states, 10 states allow drivers to add personal injury protection to their policies, but do not require it. In these states, also called add-on states, you can "add" the benefits of personal injury protection to your policy if you want, but it's not required. You might not need to get PIP if you already have health insurance — though health insurance doesn't cover lost income or funeral expenses after a crash.
In other words, your bodily injury liability coverage works the same in add-on states as it would in an at-fault state.
Who pays for car damage in a no-fault state
In a no-fault state, the driver who caused the damage to your car still has to pay for repairs or replacement. This is because the state's no-fault rules only affect injury claims — not property damage. After your car is damaged in an accident, you would make a claim with the at-fault driver's insurance company for the expenses.
Personal injury protection does not cover damage to your own vehicle if you’re the at-fault party in a car accident. In a no-fault state, you will still need to have comprehensive or collision coverage to avoid paying out of pocket for this type of damage.
You still have to pay for your own insurance deductible in an at-fault state. Deductibles are required whenever you make a collision or comprehensive claim. However, you won't pay a deductible if someone else was responsible for your car's damage and you make a third-party claim with their insurance for the damage to your property.