Quick answer: in a no-fault state, your own personal injury protection (PIP) pays your medical bills and some lost wages after a crash, no matter who caused it, and your right to sue the other driver for injuries is limited unless injuries pass a set threshold. In an at-fault (tort) state, the driver who caused the crash, through their liability insurance, pays for the other people’s injuries and damage. The Insurance Information Institute lists 12 no-fault states plus Puerto Rico. Property damage is handled under fault rules in nearly every state.
Where you live changes how a car accident claim works. In some states, you turn first to your own policy for injury costs. In most states, you file against the driver who caused the crash. The difference affects what coverage you must buy, how fast medical bills get paid and whether you can sue.
This article explains the two systems, lists which states use each and shows how fault rules affect your claim. For an overview of coverage types and pricing, see our car insurance guide.
This is general educational information, not legal advice. Pro Insurance Info is not an insurance company or a law firm. No-fault rules, PIP minimums and lawsuit thresholds change through legislation, so confirm current rules with your state insurance department or an attorney. Sources: Insurance Information Institute (III) background on no-fault auto insurance; National Association of Insurance Commissioners (NAIC); state insurance department publications for Florida, Michigan and New York; Florida House Bill 837 (2023). Checked October 2026. Questions: hello@proinsuranceinfo.com.
What Is No-Fault Insurance?
No-fault insurance is a system in which each driver’s own insurance pays for their own injury-related costs after a crash, up to the policy’s limits, regardless of who caused it. The coverage that does this is called personal injury protection, or PIP.
PIP typically pays for:
- Medical and hospital bills for you and your passengers.
- A portion of lost income if you cannot work.
- Essential services you cannot perform while injured, such as household help, in some states.
- Funeral expenses, in some states.
The idea behind no-fault is to get medical bills paid quickly without waiting for a fault decision, and to reduce small injury lawsuits. In exchange for that faster payment, no-fault states restrict when you can sue the other driver for pain and suffering.
What Is an At-Fault (Tort) System?
In an at-fault state, also called a tort state, the driver who causes the crash is responsible for the damages. Their bodily injury liability coverage pays for other people’s medical bills, lost wages and pain and suffering, and their property damage liability pays for vehicle repairs.
If you are injured by another driver in an at-fault state, you can:
- File a third-party claim with the other driver’s insurer.
- Use your own coverage, such as MedPay, collision or uninsured motorist coverage, and let your insurer seek repayment from the at-fault driver’s insurer.
- Sue the at-fault driver for damages.
Most states use the at-fault system.
Which States Are No-Fault?
According to the Insurance Information Institute, these states have no-fault auto insurance laws:
| State | Type |
|---|---|
| Florida | No-fault |
| Hawaii | No-fault |
| Kansas | No-fault |
| Kentucky | Choice no-fault |
| Massachusetts | No-fault |
| Michigan | No-fault |
| Minnesota | No-fault |
| New Jersey | Choice no-fault |
| New York | No-fault |
| North Dakota | No-fault |
| Pennsylvania | Choice no-fault |
| Utah | No-fault |
Puerto Rico also has a no-fault system. In the three “choice” states, drivers can choose between a no-fault policy with limits on lawsuits or a policy that keeps their full right to sue, usually at a higher premium.
Several at-fault states, sometimes called “add-on” states, require or offer PIP or similar first-party medical coverage without limiting lawsuits. Your state insurance department’s website lists the coverage you must carry.
How Lawsuit Thresholds Work in No-Fault States
No-fault states limit lawsuits against the at-fault driver for pain and suffering unless the injury crosses a threshold. There are two main types:
- Monetary threshold. You can sue once your medical expenses exceed a set dollar amount.
- Verbal threshold. You can sue only if your injury meets a description in the law, such as serious disfigurement, significant permanent injury, fracture or death.
New York, for example, uses a “serious injury” definition in its insurance law. Florida allows lawsuits for non-economic damages when the injury involves significant and permanent loss of an important bodily function, permanent injury, significant and permanent scarring or disfigurement, or death. Once a threshold is met, the injured person can pursue the at-fault driver through the traditional liability system.
PIP Requirements Vary Widely
PIP minimums and options differ sharply from state to state:
- Florida requires $10,000 of PIP, along with $10,000 of property damage liability.
- New York requires at least $50,000 of basic no-fault (PIP) coverage per person.
- Michigan reformed its system in 2019, effective for policies from July 2020. Drivers now choose a PIP medical limit, with options including unlimited coverage, $500,000, $250,000, and lower or opt-out choices for people who meet certain health coverage conditions, according to the Michigan Department of Insurance and Financial Services.
Because these rules change, check your state’s current requirements when you buy or renew a policy.
Property Damage Still Follows Fault
No-fault rules generally apply to injuries, not vehicle damage. In nearly every state, damage to your car is paid either by the at-fault driver’s property damage liability or by your own collision coverage. Michigan is a notable exception with its own rules for vehicle damage, including mini-tort recovery of a limited amount from an at-fault driver.
Collision coverage is especially important in no-fault states, since you may not be able to recover vehicle damage easily from another driver in every situation. Our explainer on comprehensive vs. collision coverage explains how each works.
How Fault Is Decided: Comparative and Contributory Negligence
In at-fault claims, and in no-fault states once a threshold is met, the amount you can recover depends on how your state shares fault between drivers.
| Rule | How it works | Example states |
|---|---|---|
| Pure comparative negligence | You can recover damages minus your share of fault, even if you were mostly at fault | California, New York |
| Modified comparative (51% bar) | You can recover if you were 50% or less at fault, reduced by your share | Many states, including Florida since 2023 |
| Modified comparative (50% bar) | You can recover only if you were less than 50% at fault | Several states |
| Contributory negligence | Any fault on your part can bar recovery | Alabama, Maryland, North Carolina, Virginia and Washington, D.C. |
Florida switched from pure comparative negligence to a modified comparative system with a 51 percent bar through House Bill 837 in 2023. That means in Florida, a person found more than 50 percent at fault generally cannot recover damages from the other party in negligence cases.
Adjusters use police reports, photos, witness statements, vehicle damage and state traffic laws to assign fault percentages. Our article on what an auto insurance adjuster does explains their role.
Filing a Claim in Each System
In a no-fault state:
- Report the crash to your own insurer promptly. Some states set short deadlines for PIP claims; Florida, for example, generally requires initial medical treatment within 14 days of the crash for PIP benefits to apply.
- Submit medical bills and wage loss documentation to your insurer.
- Use collision coverage or a claim against the at-fault driver for vehicle damage.
- Talk to an attorney if your injuries may meet the state’s threshold.
In an at-fault state:
- Report the crash to your insurer, and get the other driver’s insurance information.
- File a claim with the at-fault driver’s insurer, or use your own coverage first and let your insurer pursue repayment.
- Document injuries, medical bills, lost wages and vehicle damage.
- Negotiate a settlement or, if needed, file a lawsuit within your state’s deadline.
Our step-by-step guide to how car insurance claims work covers each stage, and our tips on talking to claims adjusters help you prepare for those conversations.
What to Do at the Scene in Any State
The first steps after a crash are the same whether your state is no-fault or at-fault:
- Check for injuries and call 911 if anyone is hurt or the road is blocked.
- Move to a safe spot if the vehicles can be moved and your state allows it.
- Exchange information with the other driver: name, phone number, insurer, policy number, license plate and vehicle details.
- Take photos of the vehicles, the scene, road conditions and any visible injuries.
- Get witness contact details if anyone saw the crash.
- Request a police report, or file your own report if your state requires it for crashes above a damage threshold.
- Avoid discussing fault at the scene beyond the facts. Fault is decided later by insurers, and sometimes by courts.
- Seek medical care promptly, even for injuries that seem minor, both for your health and because some PIP benefits depend on timely treatment.
Moving to a State With a Different System
If you move, your auto insurance needs to follow your new state’s rules, not your old state’s. Most states require new residents to register their vehicles and buy a policy that meets local requirements within a set number of days after moving.
When you change states:
- Tell your insurer before or right after the move, since rates and required coverages are based on where the car is garaged.
- Ask what coverages are required, such as PIP in a no-fault state or uninsured motorist coverage in states that mandate it.
- Review your health insurance alongside PIP or MedPay, since in some states the two coordinate.
- Update your vehicle registration and driver’s license on your new state’s schedule.
Keeping a policy based on an old address can lead to claim problems and coverage that does not meet your new state’s laws.
Coverage to Consider in Either System
Whatever your state’s system, these coverages fill common gaps:
- Higher liability limits, to protect your assets if you cause a serious crash.
- Uninsured and underinsured motorist coverage, which pays when the at-fault driver has too little or no insurance. See uninsured and underinsured motorist coverage explained.
- MedPay, in at-fault states, for quick payment of medical bills regardless of fault.
- Collision coverage, for your own vehicle damage.
- Higher PIP limits, in no-fault states where the minimum is low compared with the cost of a hospital stay.
Pros and Cons of Each System
| No-fault | At-fault | |
|---|---|---|
| Speed of medical payments | Usually faster, through your own insurer | Can be slower while fault is decided |
| Right to sue | Limited unless a threshold is met | Full right to sue the at-fault driver |
| Premiums | Often higher in several no-fault states | Vary widely |
| Fraud risk | Some no-fault states have struggled with PIP fraud | Disputes over fault are more common |
| Small claims | Handled without lawsuits | May lead to more small claims and disputes |
Frequently Asked Questions
What does no-fault insurance mean?
It means your own personal injury protection pays your medical bills and some lost wages after a crash, regardless of who caused it, and lawsuits for pain and suffering are limited unless injuries pass a set threshold.
How many states are no-fault?
The Insurance Information Institute lists 12 no-fault states, including three choice no-fault states, plus Puerto Rico.
Does no-fault insurance cover car damage?
Generally no. Vehicle damage is usually handled through property damage liability or your own collision coverage, under fault rules.
Can I sue in a no-fault state?
Yes, if your injuries meet the state’s threshold, such as a serious or permanent injury, or exceed a monetary limit. You can also usually pursue property damage claims under fault rules.
Does my car insurance go up if I am not at fault in a no-fault state?
Many states limit surcharges for not-at-fault accidents, and insurers generally base surcharges on fault even in no-fault states. Ask your insurer how it handles PIP-only claims.
The Bottom Line
No-fault states rely on your own PIP coverage to pay injury costs quickly and limit lawsuits, while at-fault states make the driver who caused the crash pay through liability coverage. Know which system your state uses, carry PIP or MedPay at levels that fit your health coverage, and add strong liability and uninsured motorist limits so you are protected either way.
