"No-fault insurance" is a system where you make a claim on your own insurance for small injuries from a car accident, no matter who caused the accident. The insurance that pays no-fault claims is personal injury protection, or PIP.
No-fault insurance systems are supposed to reduce the cost of auto insurance for everyone because small injury claims don't end up in court. No-fault laws are also intended to speed up claims payments for car accident victims. In no-fault states you generally can't sue other drivers for economic losses (such as medical bills and lost wages) or pain and suffering unless you suffer serious injury.
PIP usually covers:
- Lost wages if you can't work.
- Your health insurance deductible.
- Medical bills that exceed your health insurance coverage.
- Services you can't perform due to a car accident, such as childcare and house cleaning.
- Funeral costs.
- A death benefit (similar to life insurance money) to beneficiaries, in some states.
- Injuries if you're a pedestrian or bicyclist and hit by a car.
Important things to know about no-fault insurance states:
- Twelve states have a no-fault insurance system. PIP will be automatically included when you get auto insurance quotes in no-fault states.
- No-fault insurance applies only to injuries, not property damage. (Except in Michigan.)
- Each no-fault state defines a threshold for when you can sue for non-economic damages such as pain and suffering.
- No-fault laws do not always extend to motorcycles. You may not be able to buy PIP as part of motorcycle insurance.
Not all states have found that no-fault insurance reduces auto insurance costs. In Michigan, the state's unlimited PIP medical benefits have been blamed for car insurance rates that are among the highest in the nation, according to EverQuote's analysis of premiums reported by our users. No-fault systems can also be ripe with fraud. In Florida, for example, a fraud ring paid kickbacks to tow truck drivers and auto body shop owners who referred car accident victims to their chiropractic clinics. The clinics made millions off of unnecessary treatments and medical tests, according to the South Florida Sun Sentinel.
Florida no-fault insurance
Florida's minimum PIP coverage is $10,000 in medical and disability benefits and $5,000 in death benefits.
You can sue for pain, suffering, mental anguish and inconvenience if a car accident results in permanent injury, loss of bodily function, significant scarring or disfigurement, or death.
Hawaii no-fault insurance
Hawaii's minimum PIP coverage is $10,000.
You can sue if the accident causes permanent loss of a body part or bodily function, disfigurement that results in mental or emotional suffering, or if injuries exceed $5,000.
Kansas no-fault insurance
The minimum PIP coverage in Kansas is:
- $4,500/person for medical expenses.
- $900/month for one year for disability/loss of income.
- $25/day for in-home services.
- $2,000 for funeral, burial or cremation expense.
- $4,500 for rehabilitation expense.
- Survivor Benefits: Disability/loss of income up to $900/month for one year.
- In-home services up to $25/day for one year.
You can sue for pain, suffering, mental anguish and inconvenience if the injury is at least $2,000 or if the accident results in: permanent disfigurement; a fracture to a weight-bearing bone; a compound, comminuted, displaced or compressed fracture; loss of a body part; permanent loss of a bodily function; or death.
Kentucky no-fault insurance
Kentucky's minimum PIP coverage is $10,000.
You can sue for pain and suffering, mental anguish and inconvenience if your medical bills are at least $1,000 or in cases of permanent disfigurement, a fracture, loss of a body part, a permanent injury or loss of a bodily function, or death.
Massachusetts no-fault insurance
Massachusetts' minimum PIP coverage is $8,000.
You can sue for non-economic damages such as pain and suffering if medical expenses are more than $2,000 or if the accident results in death, loss of a body part, permanent and serious disfigurement, or loss of sight or hearing.
Michigan no-fault insurance
Michigan's no-fault system provides unlimited medical and rehabilitation benefits for a lifetime if you are injured in a car accident. It also provides benefits for lost wages for three years and replacement services up to $20 a day.
Michigan car owners should buy collision and comprehensive insurance if they want coverage for damage to their own cars, no matter who was at fault.
Michigan charges an annual vehicle fee to help cover the costs of its unlimited medical benefits. The cost is $170 per vehicle for 2017-2018.
You can sue for pain and suffering in cases of death, serious impairment of a bodily function, or permanent serious disfigurement.
Minnesota no-fault insurance
Minnesota's minimum PIP coverage is $40,000 and includes:
- $20,000 for medical expense loss arising out of injury to any one person;
- $20,000 for lost income, replacement services, funeral expenses, a survivor's economic loss, and survivor's replacement services arising out of the injury to any one person.
You can sue non-economic damages (such as pain and suffering) only if medical expenses are more than $4,000 or the car accident results in permanent disfigurement, permanent injury, disability for 60 days or more, or death.
New Jersey no-fault insurance
New Jersey's minimum PIP coverage is $15,000.
There are two policy choices in New Jersey: "standard" and "basic." Most people buy the standard policy, according to the state of New Jersey.
The standard policy provides PIP benefits up to $250,000 for certain injuries regardless of the limit chosen. These injuries include brain injury, spinal cord injury or disfigurement. The standard policy has two options: "unlimited right to sue" and "limited right to sue" for pain and suffering. The "basic" policy does not provide any right to sue.
New York no-fault insurance
New York's minimum PIP coverage is $50,000.
You can sue for non-economic loss such as pain and suffering if the car accident results in:
- Significant disfigurement.
- A fracture.
- Loss of a fetus.
- Permanent loss of use of a body organ, body part, function or system.
- Permanent limited use of a body organ, body part, function or system.
- A temporary injury or impairment that prevents you from doing your usual and customary daily activities for 90 days or more within six months following the accident.
North Dakota no-fault insurance
North Dakota requires at least $30,000 in PIP coverage.
You can sue for non-economic loss such as pain and suffering if the accident results in death, dismemberment, serious and permanent disfigurement, disability beyond 60 days, or medical expenses more than $2,500.
Pennsylvania no-fault insurance
Pennsylvania requires at least $5,000 in PIP coverage.
Pennsylvania offers two choices for bringing lawsuits, known as tort:
- Limited tort: Costs less but limits your rights to sue someone for pain and suffering and other non-economic damages. You can sue only if the accident results in death, serious impairment of body function, or permanent serious disfigurement.
- Full tort: Gives you unrestricted right to sue someone who caused a car accident.
Utah no-fault insurance
Utah requires at least $3,000 in PIP coverage.
You can sue only if the accident results in death, dismemberment, permanent disability, disfigurement or impairment, or medical expenses that are more than $3,000.
Source: EverQuote research on state government pages.