No-fault vs at-fault states

How at-fault (tort) states work

Most states use the traditional fault, or tort, system. The idea is simple: whoever caused the crash pays for it.

• Injuries to others. The at-fault driver's bodily injury liability coverage pays the other people's medical bills, lost wages and pain and suffering, up to the policy limits.
• Damage to others' property. Property damage liability pays to repair or replace the other car and anything else the at-fault driver hit.
• Your own losses when someone else is at fault. You file a claim with the other driver's insurer, or use your own collision, MedPay or health coverage first and let your insurer recover the money later.
• Lawsuits. There is no threshold. You can sue the at-fault driver for pain and suffering after any injury.

Deciding who was at fault, and by how much, is the heart of the system. States use different rules to split blame when both drivers made mistakes, which can reduce or even bar a payment. Our guide to the at-fault concept explains the basics.

The appeal of the fault system is that the person responsible pays, and an injured person can be fully compensated, including for pain and suffering. The downside is delay: payment can wait until fault is settled, and disputes can end up in court.

How no-fault states work

No-fault states change who pays for injuries. Every driver must carry personal injury protection, and after a crash each person's own PIP pays their medical bills, a share of lost income and some other costs, regardless of who caused it. The NAIC describes no-fault as compulsory first-party benefits combined with a general limit on lawsuits.

That limit is the trade-off. Because your own insurer pays quickly, you give up some of your right to sue. You can still sue the at-fault driver for pain and suffering, but only if your injury meets the state's tort threshold.

Verbal and monetary thresholds

There are two kinds of threshold:

• Verbal threshold. Your injury must reach a level of seriousness written into the law, such as a fracture, permanent injury, significant disfigurement or death. The Triple-I lists Florida, Michigan, New Jersey, New York and Pennsylvania as verbal-threshold states.
• Monetary threshold. Your medical costs must pass a set dollar amount before you can sue. The Triple-I lists Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota and Utah.

The NAIC's state law tables record the dollar amounts. Several states accept either a dollar amount or a serious injury.

And in the verbal-threshold states, the required PIP looks like this:

Dollar thresholds have drawn criticism. The Triple-I notes that a very low threshold made Connecticut's old no-fault law comparatively ineffective. Several states later abandoned the system, including Colorado, which let its law expire in July 2003.

Car damage is still about fault

No-fault rules cover injuries. Damage to cars and other property is still handled by fault in almost every no-fault state, so the at-fault driver's property damage liability, or your own collision coverage, pays for the car.

Michigan is the exception, because of its property protection and mini-tort rules. Under the 2019 reform (policies from July 1, 2020) the default liability is 250/500/10; drivers can choose limits as low as 50/100/10. Property protection insurance pays up to $1 million for damage in Michigan. A mini-tort rule allows claims of up to $3,000 for vehicle damage. Michigan drivers also pick their PIP medical level from a set of options, which is why the state's rules deserve a close read.

Choice no-fault: New Jersey, Pennsylvania and Kentucky

In Kentucky, New Jersey and Pennsylvania, drivers decide for themselves whether to accept limits on their right to sue.

• New Jersey offers a Limitation on Lawsuit option and a No Limitation on Lawsuit option. With the limited option, you can sue for pain and suffering only after one of the permanent injuries listed in the law, such as a displaced fracture or significant scarring. The state's buyer's guide says the choice affects what your insurance costs. If you make no choice, the limited option applies by law.
• Pennsylvania offers limited tort and full tort. The Pennsylvania Insurance Department says limited tort offers significant premium savings, but you give up pain-and-suffering payments unless your injury meets an exception in the law. Full tort applies if you do not choose limited tort.
• Kentucky applies no-fault limits automatically, but drivers can reject the limits on their right to sue by filing a form with the Department of Insurance.

The choice is a real trade-off between a lower premium and a stronger right to sue after a painful injury that heals. A licensed agent or the state insurance department can explain the exact wording on your state's form.

Add-on states: PIP without lawsuit limits

A third group sits in between. In add-on states, first-party benefits such as PIP are required or must be offered, but there is no limit on lawsuits. You get quick payment from your own policy and keep the full right to sue.

Our state facts label these states "At-fault (add-on PIP)", following the Triple-I's categories. Examples include:

• Texas: Included in every policy unless you reject it in writing (required amount: $2,500 per person)
• Maryland: Must be offered (at least $2,500); can be waived or limited
• Oregon: Required: $15,000 per person for medical expenses
• Delaware: Required: $15,000 per person / $30,000 per accident

Labels vary by source. The NAIC, for example, files Delaware and the District of Columbia under no-fault and treats Texas as a tort state, and it warns that two states in the same category may not have comparable systems. What matters for you is your own state's rules on PIP and lawsuits, which you can check in the state minimum lookup.

Every state by fault system

The table groups all states and the District of Columbia by the fault system recorded in our state facts. Each name links to that state's guide.

Each state's sources are listed in the state minimum lookup.

What changes after a crash

The biggest practical difference shows up in the days after an accident.

Example: another driver runs a stop sign and you suffer a sprained wrist with $3,000 of medical bills. In an at-fault state, you claim the $3,000 plus an amount for pain and suffering from the other driver's insurer. In a no-fault state, your own PIP pays the bills up to its limit, and you cannot sue for pain and suffering unless the injury meets the threshold. The figures are hypothetical.

What to do after a crash in a no-fault state

1. Get to safety and call the police if anyone is hurt or the cars cannot be moved.
2. Tell your own insurer quickly. PIP is a claim on your own policy, and some no-fault states set short deadlines to get treatment or report a claim.
3. See a doctor and keep every bill. PIP pays based on documented medical costs and lost income.
4. Record lost work time. Ask your employer for a statement of missed days and pay.
5. Claim car damage separately. Damage to your car usually goes through the at-fault driver's insurer or your collision coverage.
6. Check whether your injury passes the threshold. If it may be serious, a licensed attorney can explain your options under your state's law.

Our after-a-crash checklist and guide to filing a claim cover the general steps in any state.

What happens when you move or drive in another state

Your policy follows the rules of the state where your car is registered and kept. Moving from an at-fault state to a no-fault state usually means adding PIP and learning a new lawsuit rule; moving the other way can mean losing PIP and relying more on MedPay and health insurance. You will need a new policy that meets your new state's rules within that state's deadline, which our new residents guide explains.

If you are only visiting, a crash is generally handled under the laws of the state where it happened. Many policies include an out-of-state provision that adjusts your coverage to meet another state's minimums while you drive there; check your policy wording or ask your insurer.