How Does a No-Fault Car Insurance Claim Work?

Your own no-fault insurance usually covers your car accident injuries regardless of who caused the crash, but a lawsuit against the at-fault driver might still be possible.

By , J.D.
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  • When you're involved in a car accident, chances are an insurance policy will come into play at some point. In most states, the driver who caused the accident will bear financial responsibility (usually through an insurance company) for injuries and other losses.

    But in a dozen or so states, the car insurance process starts (and often ends) with a no-fault car insurance claim made through your own coverage. And in a handful of other states, a "hybrid" or "choice" no-fault system gives claimants options. In this article, we'll explain:

    • the basics of no-fault (also known as "personal injury protection" or "PIP") car insurance
    • "thresholds" for stepping outside of no-fault and filing a claim against the at-fault driver, and
    • no-fault/PIP coverage as add-ons in liability states.

    The No-Fault Car Insurance Basics

    Under the "fault" or "liability"-based car insurance systems in place in most states, when you're injured in a car accident, you usually have the option of bringing a claim for compensation against the at-fault driver—typically through that driver's insurance company. In that situation, as part of the "third party claim" process, you usually need to convince the other driver's insurance company that its own insured 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 lawsuit.

    What Is a "No-Fault State"?

    The term "no-fault state" typically refers to a state's whose laws mandate that financial responsibility for injuries and other certain losses resulting from a car accident comes from the injured person's own car insurance coverage, 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 procedure for submitting an insurance claim is streamlined. Rather than filing a third party claim with the negligent driver's insurance company, or filing a lawsuit against the at-fault driver, you submit your claim to your own insurance company. Your insurance company then pays compensation for certain financial losses related to your car accident injuries regardless of 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 because of any dispute about the cause of the accident. You do not bear the burden of having to prove to the insurance adjuster that fault of the accident lies with the other driver, and not you.

    But the other side of the coin is that in a no-fault claim, you still aren't guaranteed a settlement, and you're limited in the kinds of compensation you can collect.

    What Damages Does No-Fault Car Insurance Cover?

    The specifics of what's covered vary from state to state, but with a no-fault or PIP insurance claim you can usually get compensation for:

    • medical bills resulting from your accident injuries
    • any income lost (up to a certain dollar limit) because of your inability to work after the accident
    • cost of replacement services (if your injuries affect your ability to do housework or drive, for example), and
    • burial/funeral costs if someone died as a result of the accident.

    One big consideration here is that in a third party insurance claim or lawsuit against the at-fault driver, you can recover "pain and suffering" damages on top of reimbursement for medical bills and lost income. But "pain and suffering" and other "general" damages are not available in a no-fault claim.

    Is No-Fault Car Insurance Optional?

    No-fault car insurance is mandatory in around a dozen states. A handful of states follow some version of a "choice" no-fault system, and some form of no-fault or PIP insurance is available as an add-on in every other state. See the section below for state-by-state details.

    Car Accident Lawsuits Are Still Possible In No-Fault States

    In every no-fault car insurance state, injured drivers and passengers are allowed to step outside the no-fault system and file a third-party insurance claim or car accident lawsuit against the at-fault driver. But the claim must meet certain thresholds set by state law. That means:

    Get more details on the role of insurance in a car accident case.

    Which Are the 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 the circumstances of your car accident claim let you "step outside" of no-fault under the applicable threshold, 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, which usually means that at the time you purchase a car insurance policy, you can elect whether you want to be insured under no-fault or the more traditional liability-based insurance system (and you may have a choice to continue with no-fault before making a claim after an accident.

    Finally, some states (including Delaware and Oregon) require no-fault coverage as an add-on to any car insurance policy, but after an accident there are no limitations on a claimant's options for holding another driver or party financially responsible for damages.

    (Note: While most no-fault coverage allows you to claim medical expenses, lost income, and other financial losses up to your no-fault policy limits, vehicle damage claims are typically not part of the no-fault scheme.)

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

    So far we've mostly talked about no-fault car insurance in the context of state auto insurance schemes. 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). In a number of these states (including Texas) insurance companies must 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, you might want to discuss your situation with a lawyer and get a full understanding of 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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