What Is a No-Fault State?

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When an accident happens in many states, the responsibility for paying for bodily injury and property damage falls to the insurance of the person who is at fault. Some states, however, do not follow this model, instead placing the burden on each driver’s insurance to cover their own losses.
It’s important to know how the no-fault system works if you plan on moving to or plan on spending time in a no-fault state. A no-fault state also requires drivers to carry Personal Injury Protection (PIP) coverage as a part of their normal coverage.
To ensure that you are fully covered if you live in or plan on moving or traveling to a no-fault state, check out the important information below.

What Is a No-Fault State?

No-fault states, unlike at-fault states, shift the burden of paying for any medical or repair costs associated with a car accident onto each individual driver. This means that as a driver in a no-fault state, you must maintain insurance to cover your losses if someone hits you, even if you are not at fault for the accident.
No-fault states do this to try and lower the cost of car insurance by removing the need to take accidents that result in minor injuries or property damage to court. Keep in mind that in some no-fault states, you can still sue the at-fault driver if the costs associated with the accident are severe.

What Happens if You Get Into an Accident in a No-Fault State?

If you find yourself in an accident in a no-fault state, there are certain steps you must take. First, submit your claim to your own insurance company and not to the insurer for the responsible party. Your insurer will pay you for any medical bills or any property damage you suffered in the accident.
A no-fault system is quick and efficient. You don’t have to worry about whether your insurance will pay for the claim or not, and there is no burden of proof to prove who was at fault in the accident. However, you are also usually limited in the kinds of compensation you can collect, including any pain and suffering you might have gone through as a result of the accident.

What is PIP and How Does it Work?

No-fault states also require you to carry PIP insurance. PIP is additional coverage that helps pay for your medical costs and can even cover other expenses that might result from an accident, such as lost wages and funeral expenses.
PIP works in conjunction with whatever medical insurance you may or may not have, so it is important that you have enough PIP to cover additional expenses outside of your normal medical insurance coverage.

States with No-Fault Laws

Currently, only 12 states in the U.S. are considered true no-fault states. In addition to being no-fault, these states also require individuals to carry PIP to supplement their regular insurance. No-faults states in the U.S. include:
  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Pennsylvania
  • Utah
The cost of insurance in a no-fault state depends on your location. Just like in states with a more conventional at-fault system, insurance premiums are affected by such factors as your age, the type of vehicle, and your driving record.
As for PIP, each state mandates the minimum amount you have to buy. Any amount over that depends on your circumstances. If you have medical insurance, then you can probably go with the minimum amount of coverage. If you do not have separate health insurance coverage, then you should consider getting additional PIP coverage.