No Fault Auto Insurance States and Laws

November 7, 2013

9 states in the US support no fault auto insurance. Find out how no fault car insurance compares to standard coverage, and whether it's right for you.

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.

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No-fault car 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.

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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.

See more: The Disadvantages of No Fault Car Insurance >>

Because no fault insurance laws differ from state to state, we've provided you with some specific information on a few of the largest no fault insurance states:

New York

According to New York no fault insurance law, motorists are required to carry a minimum of $50,000 in personal injury protection (PIP) and $10,000 in property damage liability (PDL) coverage, plus Under Insured coverage in the amount of $25,000.00 to $50,000.00 as well as Uninsured Motorist coverage in the amount of $25,000.00 to $50,000. This insurance coverage is called a 50-10-25 plan.

Additionally, to simplify the state's law associated with no-fault accidents, New York allows a motorist who is involved in an accident to recover certain costs associated with the incident. These entitlements include: coverage for medical expenses, lost wages, recoveries for pain and suffering and legal defense if the policy-holder is involved in a lawsuit resulting from an incident.

New York insurers further encourage motorists to purchase additional coverage based on a range of supplementary programs including:

  • No APIP, no work loss. This program maintains the motorist's state-required PIP coverage with no additional coverage. Lost wages are not covered if the motorist's passengers are unable to work.
  • No APIP, work loss only. Supplements the motorist's state-required PIP coverage with work loss coverage. If the motorist or one's passengers are unable to work due to accident-related injuries, work loss coverage helps recover lost wages, up to $2,000 per month, per accident.
  • Out-of-state, no work loss. Extends the motorist's state-required PIP coverage to guest occupants. Lost wages are not covered if the motorist or his/her passengers are unable to work.
  • Out-of-state plus work loss. Extends the motorist's state-required PIP coverage to guest occupants. This program supplements basic PIP coverage with work loss coverage. If the motorist or one's passengers are unable to work due to accident-related injuries, work loss coverage helps recover lost wages, up to $2,000 per month, per accident.
  • Full APIP no work loss. Extends the motorist's state-required PIP coverage to guest occupants and increases the motorist's PIP coverage to a limit of $100,000. Lost wages are not covered if the motorist or one's passengers are unable to work.
  • Full APIP plus work loss. Extends the motorist's state-required PIP coverage to guest occupants and increases one's PIP coverage to a limit of $100,000. Additionally, the program supplements the motorist's basic PIP coverage with work loss coverage. If the motorist or one's passengers are unable to work due to incident-related injuries, work loss coverage helps recover lost wages, up to $4,000 per month, per event.
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Florida

In Florida, motorists must carry a minimum of $10,000.00 in personal injury protection (PIP) and $10,000.00 in property damage liability (PDL). These no-fault requirements apply to all four-wheel and two-wheel vehicles registered in the state of Florida, and the insurance coverage must be held concurrently from year to year.

In the case of seasonal drivers, i.e. those residing in the State for more than 90 days in a particular year, the PIP and PDL requirements also apply. Specific to no-fault PIP insurance, these premiums cover the motorist when driving one's own car or anyone else's car. PIP also covers the motorist and members of the motorist's household and passengers who do not have PIP coverage. This coverage will also cover the motorist and members of the motorist's immediate household in the event of accidents outside of the state of Florida, as long as the incident is inside the territory of the United States.

Along with the previously stated no-fault minimums, motorists are also encouraged to secure bodily injury coverage in the amount of $10,000.00 per person, along with $20,000.00 per occurrence. In the event that a motorist does become involved in an accident and does not carry the minimum requisite bodily injury coverage, the Florida Department of Highway and Safety and Motor Vehicles (DHSMV) is likely to require this coverage in the future in order to accommodate the State's Financial Responsibility Law.

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Michigan

In Michigan, motorists are required to carry a minimum of $20,000.00 in personal injury protection (PIP) and $40,000.00 in property damage liability (PDL) coverage. Additionally, to simplify the state's law associated with no-fault accidents, Michigan allows a motorist who is involved in an accident to recover certain costs associated with the incident. These include: provision of wage loss coverage in the case that the individual is injured and unable to work, coverage for all reasonable and necessary medical expenses, plus entitlement to reimbursement for medical mileage to and from your health providers, and entitlement to recover up to $20 per day for services the individual can no longer do because of an incident (three years maximum from the anniversary date).

Along with the minimum requirements and entitlements, Michigan motorists are also encouraged to secure additional bodily injury coverage in the amount of $100,000.00 per person, and if the motorist owns a home, or other significant assets the additional minimum should be $500,000.00 or more.

Further, the state recommends that Uninsured Motorist (UM) coverage should be additionally secured in the amount of $100,000.00 or more, along with carrying Underinsured Motorist (UIM) coverage in the amount of $100,000.00.

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Other No Fault States

If you live in one of the other no fault auto insurance states (Hawaii, Kansas, Massachusetts, Minnesota, North Dakota and Utah), here are some additional resources:

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