No-Fault Insurance Definition

Car insurance that pays the car accident-related medical bills, lost wages, and certain other out-of-pocket losses of the policyholder (and any other covered person) after a crash, regardless of who was at fault.

In around a dozen states, no-fault (also called "personal injury protection" or "PIP" coverage) is the primary method for making a car insurance claim for injuries after an accident (no-fault car insurance doesn't apply to vehicle damage).

In no-fault car insurance states, an insurance claimant's car accident injuries must meet a certain threshold (in terms of seriousness of the injuries or the dollar value attached to accident-related medical treatment) before they can step outside the no-fault system and pursue a claim against the person who caused the accident.