What States Have No Fault Auto Insurance Laws?

No fault auto insurance is a term used to describe insurance plans in certain states that pay benefits to policyholders, and sometimes their passengers, regardless of the party responsible for the accident. This type of coverage is auto insurance law in Puerto Rico and nine participating states including Florida, Hawaii, Kansas, Michigan, Massachusetts, Minnesota, New York, North Dakota and Utah. In addition, New Jersey, Pennsylvania and Kentucky allow drivers to choose between no-fault and traditional coverage.

No-fault auto insurance, sometimes known as personal injury protection (PIP), is intended to limit premiums by reducing costly litigation and by making quick payments to all individuals injured in an accident. PIP-insured drivers are limited from collecting loses caused by other parties in civil court. Individuals injured in an accident with a no-fault insured driver can expect their medical bills, rehabilitation costs and lost wages to be covered by the policyholder's insurance. Because of this, they may not sue the driver or vehicle owner for pain, emotional distress or suffering, except under certain predetermined conditions known as thresholds.

No-fault car insurance policies allow for litigation based on one of two categories of thresholds: verbal and monetary. A verbal threshold is a qualitative measurement that allows lawsuits based on severe personal damages like death, dismemberment or permanent injury. Monetary thresholds use a quantitative amount that must be spent on medical expenses before a lawsuit is allowed. Verbal thresholds are used in California, Florida, Michigan, New Jersey, New York and Pennsylvania, while Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota and Utah rely on monetary thresholds.