What Is No-Fault Car Insurance?
In a no-fault system, your own policy's personal injury protection (PIP) pays your medical bills and some other losses after a crash, no matter who caused it. In exchange, no-fault states limit when you can sue the at-fault driver for pain and suffering, usually only for serious or permanent injuries. Some states, such as New Jersey and Pennsylvania, let drivers choose whether to accept that lawsuit limit for a lower premium. PIP covers injuries; damage to vehicles is handled by other coverages.
What the law says
- New Jersey's Department of Banking and Insurance says personal injury protection (PIP) is sometimes called "no-fault" coverage because it pays your own medical expenses no matter who caused the accident; it covers medical treatment and can also reimburse other expenses such as lost wages. New Jersey Department of Banking and Insurance, Everything Auto Insurance (2026)
- The Alabama Department of Insurance's state-by-state list groups 12 states as no-fault states: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah. Alabama Department of Insurance, State Auto Insurance Laws
- The same Alabama list separately names nine tort jurisdictions where personal injury protection is available or required: Arkansas, Delaware, the District of Columbia, Maryland, Oregon, South Carolina, South Dakota, Texas, and Virginia. The remaining states on the list are classified as tort states. Alabama Department of Insurance, State Auto Insurance Laws
- New York requires no-fault (personal injury protection) coverage to register a car. It covers medical expenses and lost earnings for the driver and passengers injured in, or a pedestrian injured by, your car, up to $50,000 per person, and is designed to pay promptly regardless of who was at fault. New York State Department of Financial Services, Purchasing Automobile Insurance
- New York DFS says you may sue another driver who caused the accident that injured you if you sustain a "serious injury" as described in Section 5102(d) of the New York Insurance Law. New York State Department of Financial Services, FAQ: Consumer Questions About No-Fault Insurance
- New York DFS says a no-fault claim notice must be given no more than 30 days after the accident, unless you submit written proof giving clear and reasonable justification for the delay. New York State Department of Financial Services, FAQ: Consumer Questions About No-Fault Insurance
- Florida requires every vehicle with a current Florida registration to carry at least $10,000 in PIP and $10,000 in property damage liability. PIP covers 80 percent of necessary and reasonable medical expenses up to $10,000 and covers you regardless of whether you are at fault. Florida Department of Highway Safety and Motor Vehicles, Insurance Requirements
- Florida's Department of Financial Services says PIP also pays 60 percent of work loss and includes a $5,000 death benefit, and that initial medical care must be received within 14 days after the accident. Florida Department of Financial Services, Personal Automobile Insurance Overview
- In New Jersey, drivers with a Standard Policy must choose between an Unlimited Right to Sue and a Limited Right to Sue. With the limited option, you agree not to sue for pain and suffering unless you have one of the listed injuries, such as loss of a body part, significant disfigurement or scarring, a displaced fracture, loss of a fetus, a permanent injury, or death. The Basic Policy includes the Limited Right to Sue option. New Jersey Department of Banking and Insurance, Everything Auto Insurance (2026)
- Pennsylvania drivers choose limited tort or full tort. Limited tort lowers premiums but bars recovery of certain damages, such as pain and suffering, unless the injury meets an exception in the law; if you do not specifically elect limited tort, you are deemed to have elected full tort. Pennsylvania Insurance Department, Automobile Insurance Guide (Rev. 10/2016)
FAQ
What does PIP pay for?
It depends on the state. In New York, required PIP covers medical expenses and lost earnings for the driver, passengers, and pedestrians struck by your car, up to $50,000 per person.
Can I sue the other driver in a no-fault state?
Usually only if the injury is serious enough. In New York, you may sue the driver who caused the accident if you sustain a "serious injury" as defined in state insurance law.
What is a "choice" no-fault state?
Some states let you choose your lawsuit rights. In New Jersey, Standard Policy holders choose between an Unlimited Right to Sue and a Limited Right to Sue; the limited option costs less but restricts lawsuits for pain and suffering.
Does choosing a limited right to sue affect my medical bills?
No. New Jersey says the lawsuit options only affect suits for pain and suffering (non-economic losses); medical expenses and some economic losses are paid up to your PIP limits regardless of the choice.
Does no-fault insurance pay for damage to my car?
PIP covers injuries. Florida, for example, requires both $10,000 in PIP and a separate $10,000 in property damage liability coverage.
Which states are no-fault states?
The Alabama Department of Insurance lists Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah as no-fault states.
Related
- What Is an SR-22?
- What Does Full Coverage Car Insurance Mean?
- What Is Uninsured and Underinsured Motorist Coverage?
- Car Insurance & Vehicle Laws by state
General legal information, not legal advice. Laws change and local rules can differ; check the linked official source or talk to a lawyer about your situation.