What's the difference between no-fault and at-fault states?

Every state has different car insurance regulations for establishing fault in an accident and determining who is financially responsible for damages caused. Twelve states are classified as no-fault states, while the remaining 38 (plus Washington, D.C.) are considered at-fault states.

Simply defined, “no-fault” means that in the event of a collision, each driver is protected (or indemnified) for injuries by their own car insurance policy, regardless of who may have been at fault.

By contrast, “at-fault” means that the driver who is held responsible for causing an accident is the person whose insurance must indemnify others for their losses, up to their policy limits.

Key highlights

• There are 12 states that have no-fault car insurance laws.
• In no-fault states, you must purchase personal injury protection (PIP) insurance to cover your medical bills after a crash, no matter who was responsible.
• PIP insurance is also available in a handful of at-fault states as optional supplemental coverage.
• Car insurance premiums tend to be more expensive on average in no-fault states.

What's the difference between no-fault states and at-fault states?

No-fault states and at-fault states – also known as tort states because there are fewer limitations on seeking legal recourse for damages -- differ in a few important ways.

“In a no-fault state, everyone involved in an auto accident is responsible for their own property damage and injuries, no matter who is at fault in the accident,” says Kristine Pokrandt, an agency owner with Goosehead Insurance in suburban Chicago.

In an at-fault state, by contrast, “the responsibility of damages from an accident falls on the person who is determined to be at fault for the accident,” Pokrandt says. “The driver who is responsible for the accident will have to pay for the injuries and property damage of every driver and anyone else involved in the accident.”

In addition, no-fault states make it much more difficult to sue other drivers for damages you may have sustained in a crash. Typically, you can only sue if you have sustained severe injuries or a death has occurred, or if your medical bills have reached a certain dollar amount.

Only 12 states have no-fault car insurance laws. The other 38 states, including Washington D.C., are considered at-fault states.

What is no-fault insurance?

Drivers who live in no-fault states are required to carry a special type of insurance, called personal injury protection (PIP). PIP covers medical expenses for you and your passengers if you are injured in an accident, no matter which driver was responsible. It also covers things like lost wages, rehabilitation costs and funeral expenses.

However, it does not provide any coverage for your vehicle or other property damage. Instead, your comprehensive or collision insurance will pay for damage to your own vehicle, while your property damage liability insurance will cover damage to others’ vehicles and personal property. If the other driver is at fault, their property damage liability insurance will pay for damage to your vehicle.

“All no-fault states require PIP to help reduce potential lawsuits filed over car accidents, although the amount of coverage you’re required to carry will vary from state to state,” Pokrandt says.

No-fault states may also require medical payments coverage (MedPay), a more basic coverage for medical bills regardless of fault.

What is at-fault insurance?

If you cause an accident in an at-fault state, your liability insurance will cover the other person’s medical expenses and property damages up to your coverage limits. This prevents you from paying out of pocket for someone else’s losses that you are responsible for, as long as you have enough coverage. The reverse applies if the other driver is at fault; their liability insurance will cover your injuries and damage.

At-fault insurance doesn’t provide any coverage for your medical expenses or your property damage after an accident where you are at fault. If you want protection for your potential losses, you will need to get a full coverage policy that includes collision, comprehensive and medical payments insurance.

No-fault states vs. at-fault states

There are 12 states that have no-fault car insurance laws:

• Florida
• Hawaii
• Kansas
• Kentucky
• Massachusetts
• Michigan
• Minnesota
• New Jersey
• New York
• North Dakota
• Pennsylvania
• Utah

The other 38 states, as well as Washington D.C., are considered at-fault states and have different car insurance requirements.

Which at-fault states require PIP coverage?

There are three states that require PIP but are otherwise considered at-fault states. These states include:

• Delaware
• Maryland
• Oregon

Additionally, there are several states that have optional PIP. In these states, car insurance companies are required to offer PIP to policyholders, but drivers can decline the coverage:

• Arkansas
• Connecticut
• District of Columbia
• Texas
• Washington

Are insurance rates higher in no-fault states?

Car insurance premiums in no-fault states tend to be higher on average than in at-fault states. That’s because in no-fault states, the insurance company provides a payout for the insured’s medical expenses regardless of which driver was responsible. In an at-fault state, the insurance company only has to pay for damages if the insured is found to have caused the accident.

The rates below were collected from auto insurance comparison site CarInsurance.com for single, 40-year-old male and female drivers of a 2023 Honda Accord LX with a good insurance score and no violations on their record for full coverage insurance policy with liability limits of 100/300/100 and a $500 comprehensive and collision deductible. 

How does no-fault insurance work?

If you get into an accident in a no-fault state, your insurance company will cover your medical expenses and lost wages, regardless of who was responsible. In this situation, you would file a claim with your insurance company to get reimbursed for your medical treatment.

However, the driver responsible for an accident in a no-fault state is still responsible for the other person’s property damage. PIP only covers your medical expenses, so if your vehicle gets damaged in an accident you didn’t cause, you still will need to file a claim with the at-fault driver’s insurance company.

How does at-fault insurance work?

In an at-fault state, the person who causes an accident must compensate the other driver for their injuries and property damage.

For example, imagine you rear-end another vehicle, and the driver complains of neck pain. In this case, your bodily injury liability insurance would pay for their medical bills and treatment related to their injury, up to the coverage limits of your policy.

In most cases, the driver who gets injured in an accident will file a bodily injury claim with the at-fault driver’s insurance company. The insurance carrier will then investigate the claim and settle with the injured person.

Like in no-fault states, drivers who cause an accident in at-fault states must pay for third-party property damage. If the at-fault driver’s vehicle gets damaged, they must use their collision insurance to cover the cost of repairs.

How is fault determined in an accident?

When it comes to auto accidents, there is often a dispute over who is responsible. To determine fault, insurance companies typically rely on police reports, written accounts of the incident and witness statements.

However, which driver was responsible for a collision isn’t always clear. Depending on the situation, it’s possible that both drivers may share responsibility, which also impacts how much money each driver is entitled to in some states.

To address accidents with shared fault, some states have modified comparative negligence laws, which allow drivers to seek compensation only if their assigned fault is under a certain percentage. For example, in a state with modified comparative negligence laws, a driver might only be able to seek compensation from the other person if they were less than 50% responsible.

Who pays in a no-fault state?

In a no-fault state, your insurance company covers medical bills for you and your passengers if you get injured in an accident, whether or not you caused the crash. However, the at-fault driver is responsible for covering property damage expenses for the other parties involved.

Does your insurance go up if you are in an accident in a no-fault state?

In general, your car insurance premium will go up if you are in an accident in a no-fault state. In both no-fault states and at-fault states, car insurance premiums depend on a variety of factors, including your driving record and claim history. Getting into an accident makes you riskier to insure, which is why insurance companies often raise rates after a crash.

Methodology

Editors collected rate information from auto insurance comparison site CarInsurance.com for single, 40-year-old male and female drivers of a 2023 Honda Accord LX with a good insurance score and no violations on their record for full coverage insurance policy with liability limits of 100/300/100 and a $500 comprehensive and collision deductible.

In addition, we also calculated rates for these hypothetical drivers, but with one or more of the following on their record: speeding ticket, at-fault accident, DUI/DWI, poor credit history, or a lapse in coverage.

We analyzed more than 53 million quotes, over 34,000 ZIP codes, and 170 insurance companies nationwide.

Note: 100/300/100 means up to $100,000 for the medical bills of those you injure, up to $300,000 per accident for bodily injury liability for all persons injured in one accident, and $100,000 to repair other drivers’ cars and property you damage.