What Is No-Fault Car Insurance and Which States Have It?
In a Nutshell: No-fault car insurance means your own insurance pays for your medical expenses and lost wages after an accident — regardless of who caused it. In exchange, your right to sue the other driver is limited. Currently 12 states operate under no-fault systems. The remaining states use traditional "tort" systems where fault determines who pays.
The 12 No-Fault States
| State | PIP Required | Minimum PIP | Can You Sue? |
|---|---|---|---|
| Florida | Yes | $10,000 | Limited (verbal threshold: death, significant/permanent injury) |
| Hawaii | Yes | $10,000 | Limited (exceeds $5,000 medical or significant injury) |
| Kansas | Yes | $4,500 | Limited (verbal threshold: serious injury) |
| Kentucky* | Yes (opt-out available) | $10,000 | Depends on choice (choose no-fault or tort) |
| Massachusetts | Yes | $8,000 | Limited (verbal threshold: death, serious injury) |
| Michigan | Yes | $250,000 (or unlimited option) | Limited (serious impairment or death) |
| Minnesota | Yes | $40,000 | Limited (verbal threshold: permanent injury) |
| New Jersey* | Yes | $15,000 | Depends on choice (limited tort or full tort) |
| New York | Yes | $50,000 | Limited (serious injury threshold: death, dismemberment, fracture, etc.) |
| North Dakota | Yes | $30,000 | Limited (serious injury) |
| Pennsylvania* | Yes (opt-out available) | $5,000 | Depends on choice (limited or full tort) |
| Utah | Yes | $3,000 | Limited (medical exceeds $3,000 or death/permanent injury) |
*Kentucky and Pennsylvania are "choice" no-fault states. New Jersey allows limited or full tort choices.
How No-Fault Works
The Basic Flow
- Accident happens — Regardless of fault
- Your PIP pays first — Covers your medical bills, lost wages, essential services
- Health insurance may supplement — After PIP is exhausted
- Suing is limited — You can only sue the other driver if injuries meet a serious "threshold"
Threshold Types
| Threshold Type | How It Works | States |
|---|---|---|
| Verbal threshold | Describes the type of injury (death, permanent injury, serious disfigurement) | FL, MI, NY, PA |
| Monetary threshold | Dollar amount of medical bills before you can sue | HI ($5k), KY ($1k), UT ($3k) |
No-Fault vs. Tort Systems
| Aspect | No-Fault | Tort (Traditional) |
|---|---|---|
| Who pays your medical bills | Your PIP insurance | The at-fault driver's insurance |
| Can you sue? | Limited (threshold applies) | Yes (full legal rights) |
| Medical coverage speed | Fast (your own insurer pays) | Slower (fault must be determined) |
| Small claims | Handled quickly by PIP | Often go to court |
| Average premium | Higher (on average) | Lower (on average) |
| States | 12 states | 38 states + DC |
Pros and Cons of No-Fault
| Pros | Cons |
|---|---|
| Faster payment for medical bills | Higher premiums in most no-fault states |
| Less litigation (fewer small lawsuits) | Can't sue even if you want to |
| Lost wages and essential services covered | PIP benefits may be limited in amount |
| Everyone gets paid regardless of fault | Requires purchase of additional PIP coverage |
| Reduces court burden | May not cover all accident-related costs |
The 38 Tort States
All other states (including California, Texas, Ohio, Georgia, Virginia, and Illinois) use tort systems where:
- The at-fault driver's liability insurance pays for injuries and damages
- You can sue the at-fault driver for medical bills, lost wages, and pain and suffering
- There's no requirement for PIP (though MedPay is often available as optional)
- No threshold limitations on lawsuits
Add-On States vs. No-Fault
Some states have "add-on" systems that combine elements of both:
| Add-On States | How They Work |
|---|---|
| Maryland | MedPay is required but no threshold on lawsuits |
| Oregon | PIP is required but no lawsuit threshold |
| Washington | PIP is offered but optional, no threshold |
| Texas | PIP is offered (must be rejected in writing), no threshold |
Add-on states require or offer PIP-style coverage without restricting your right to sue. They're a middle ground between no-fault and pure tort.
Does PIP Cover You Outside Your State?
| Situation | PIP Coverage |
|---|---|
| You crash in a tort state (with PIP) | Your PIP still applies — covers you anywhere in the US |
| You crash in Canada/Mexico | PIP generally applies, but check your policy |
| You drive a rental car | PIP extends to rental cars |
| You're a pedestrian hit by a car | PIP covers you as a pedestrian |
Key Takeaways
- No-fault means your own PIP coverage pays regardless of fault
- 12 states use no-fault systems: FL, HI, KS, KY, MA, MI, MN, NJ, NY, ND, PA, UT
- No-fault states limit your right to sue to reduce litigation
- Tort states (38) allow full lawsuits but require determining fault
- PIP benefits typically include medical bills, lost wages, and essential services
- Add-on states offer PIP benefits without restricting lawsuit rights
- No-fault states tend to have higher average premiums than tort states
Last updated: July 2026
Disclaimer: This article provides general information about no-fault car insurance systems. State laws and requirements vary significantly. Always consult with a licensed insurance agent for advice specific to your situation and state.