How Does a No-Fault Car Insurance Claim Work?

If you live in a no-fault state, your own insurance typically covers your damages no matter who caused the accident. But you still may be able to sue the other driver in some situations.

By , J.D., University of San Francisco School of Law
Updated by Stacy Barrett, Attorney · UC Law San Francisco

When you're involved in a car accident, chances are insurance will come into play at some point. In most states, the driver who caused the accident pays for accident-related injuries and losses, usually through an insurance company.

But around a dozen or so states have a different system, called no-fault car insurance. In these states, drivers rely on their own insurance coverage to cover accident-related losses no matter who is at fault for the accident. And in a handful of other states, a "hybrid" or "choice" no-fault system gives claimants options.

In this article, we'll cover:

  • the basics of no-fault car insurance(called "personal injury protection" or "PIP")
  • injury thresholds and when you can step out of the no-fault system, and
  • how to add PIP coverage in any state.

The No-Fault Car Insurance Basics

Most states have a liability insurance system. If you're injured in an accident in a liability state, you can file an insurance claim against the person who caused your injuries. When you make this type of "third-party car insurance claim," you have to prove the other person was at fault for the car accident.

Proving fault can be a long and complicated process involving police reports, witness statements, photographs, and other forms of car accident evidence. Even after all of that, the other driver's insurance company may still deny the claim, forcing you to file a car accident lawsuit.

What Is a "No-Fault State"?

A "no-fault state" is a state with an insurance system that requires people who are injured in car accidents to turn to their own insurance coverage first, regardless of who caused the accident.

Making a No-Fault Car Insurance Claim

If you live in one of the dozen or so no-fault car insurance states, the process for submitting an insurance claim is streamlined. Rather than filing a third-party insurance claim or a lawsuit against the at-fault driver, you submit your claim to your insurance company. Your insurance company then pays compensation for certain financial losses related to your car accident injuries, no matter who caused the accident.

So, in making a no-fault car insurance claim, you don't have to worry about whether the insurance company will deny your claim over a dispute about who caused the accident. You don't bear the burden of having to prove to an insurance adjuster that the other driver is to blame for the accident, and not you.

The downside of the no-fault insurance system is that you still aren't guaranteed a settlement and you're limited in the kinds of compensation you can collect.

What Damages Are Covered by No-Fault Car Insurance?

After a car accident, you can make a no-fault insurance claim under your personal injury protection (PIP). No-fault coverage varies from state to state, but you'll likely get compensation for:

  • medical bills
  • lost income (up to a certain dollar limit) if you're unable to work after an accident
  • cost of replacement services (if your injuries affect your ability to do housework or drive, for example), and
  • funeral costs if someone died as a result of the accident.

You'll notice that "pain and suffering" damages" isn't on this list. One of the tradeoffs for a streamlined process in no-fault states is that you can't get compensation for general damages like pain and suffering in no-fault claims like you can when you make a third-party claim in a fault state.

Is No-Fault Car Insurance Optional?

No-fault car insurance is mandatory in around a dozen states. A handful of states follow a "choice" no-fault system. And every state offers some form of no-fault or PIP insurance as an add-on to other car insurance policies. See below for state-by-state details.

Learn more about types of insurance coverage.

Car Accident Lawsuits Are Still Possible In No-Fault States

Even in no-fault car insurance states, injured drivers and passengers are allowed to step outside of the no-fault system and file third-party insurance claims and car accident lawsuits against at-fault drivers when:

  • the accident caused "significant" injury, as defined by state law, or
  • the accident resulted in medical bills above a certain dollar threshold.

The Serious Injury Threshold

No-fault states have their own definitions of what counts as a serious injury in the no-fault system.

For example, if you're injured in an accident in Florida, your mandatory PIP coverage will kick in to pay for your losses, regardless of who was to blame for the accident. But if you're injuries are "serious," you can pursue an insurance claim or personal injury lawsuit against the person who caused the crash. Florida's serious injury threshold is:

  • significant and permanent loss of an important bodily function
  • significant and permanent scarring or disfigurement
  • permanent injury within a reasonable degree of medical probability, or
  • death.

Serious injuries in New York's no-fault system include:

  • death
  • dismemberment
  • significant disfigurement
  • bone fractures
  • loss of a fetus
  • permanent damage to organs, functions, or systems, and
  • disability lasting at least 90 days during the 180 days following the injury.

(Fla. Stat. Ann. § 775.15 (2022); N.Y. Ins. Law § 510(d) (2022).)

The Monetary Threshold

Some no-fault states allow people to pursue an insurance claim or lawsuit when their medical expenses or lost wages exceed a monetary threshold that is set by the individual state.

For example, in Utah, you can pursue a liability claim if you have at least $3,000 in accident-related medical expenses or if you meet the serious injury threshold.

(Utah Code § 31A-22-309 (2021).)

No-Fault Car Insurance States

Around ten states follow a traditional "no-fault" car insurance system, where anyone injured in an accident must turn first (and sometimes exclusively) to their own car insurance coverage. Remember, in these states, unless you meet the injury or monetary threshold and step outside of the no-fault system, you won't be able to collect "pain and suffering" damages in connection with the accident and your injuries:

New Jersey, Pennsylvania, and the District of Columbia follow a "hybrid" or "choice no-fault" system. In these states, you can choose whether to be insured under no-fault or the more traditional liability-based insurance system.

Finally, some states (including Delaware and Oregon) require no-fault coverage as an add-on to any car insurance policy, but an injured person isn't limited to pursuing a no-fault claim after an accident.

You Can Usually Add "Personal Injury Protection" In Any State

So far we've covered no-fault car insurance in the context of state insurance laws and requirements. But almost every car insurance company in every state offers customers the option of purchasing no-fault or "personal injury protection" coverage on top of more traditional liability-based coverage.

Some states, including Texas, require insurance companies to offer no-fault or personal injury protection coverage to customers who are purchasing a car insurance policy, but the customer is free to decline these optional coverages.

Learn more about how "personal injury protection" car insurance works.

Getting Help After a Car Accident

If you're involved in a car accident in a no-fault state, especially if the crash resulted in serious injuries, talk to a lawyer about your options. Learn more about how a car accident lawyer can help. When you're ready, you can connect with a car accident lawyer directly from this page for free.

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