How does no-fault car insurance work after a car accident?
If you live in one of the states that follow some variation of a no-fault car insurance system -- including Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah -- you’ll likely need to play by a different set of rules if you’ve been injured in a car accident. (Note: a number of states follow "choice" no-fault rules; talk to your insurance agent or an attorney for the specifics in your state.)
You (and anyone else covered under your policy) will need to turn first to your car insurance coverage (usually under what is known as "personal injury protection" or PIP coverage) to get compensation for medical treatment and lost income stemming from the accident, up to a certain limit. It doesn’t matter who caused the car accident (they don’t call it “no-fault” for nothing). For minor injuries, that’s usually the end of the story; your claim is resolved with your own insurance carrier. But you can’t get non-economic damages, which includes compensation for pain and suffering, in a no-fault or PIP claim. (Also keep in mind that no-fault rules don’t usually apply to vehicle damage claims; Michigan is one exception.)
But if your car insurance claim meets the statutory threshold in place in your state, either because your injuries are serious enough or because you’ve incurred medical bills above a certain dollar limit, you’re allowed to step outside of the no-fault system and file a personal injury lawsuit against the at-fault driver. The specifics depend on the no-fault laws in your state, but if a lawsuit is an option for you, you'll be able to recover the full spectrum of personal injury damages, including pain and suffering.
by: David Goguen, J.D.