Where you live determines how an auto injury claim works more than almost any other factor. Two drivers in identical crashes, in different states, can face completely different processes for getting medical bills paid and different rights to sue.
The terminology does not help. "No-fault" sounds like it means nobody is responsible, which is not what it means at all.
The four systems
State auto injury systems fall into four broad categories.
Tort liability. The traditional system, used by most states. The at-fault driver's bodily injury liability coverage pays the injured party. You can sue for your losses, including pain and suffering, without a threshold to clear.
No-fault. Your own personal injury protection pays your medical expenses and certain other losses regardless of who caused the crash. In exchange, your right to sue the other driver is restricted unless your injury clears a threshold. PIP is mandatory in these states.
Choice no-fault. The driver decides. You may accept a restricted right to sue in exchange for the no-fault arrangement, or reject the threshold and keep full tort rights.
Add-on. A tort liability system that also requires or permits PIP coverage. You get first-party medical benefits, but without the restriction on suing, so it is not truly no-fault.
The Insurance Information Institute counts twelve states plus Puerto Rico with no-fault laws.
Tort thresholds
In a no-fault state, you can step outside the system and sue the at-fault driver only if your injury meets a defined threshold. There are two kinds, and the difference matters.
| Threshold type | How it works | States III lists |
|---|---|---|
| Verbal | Defined in words: death, significant disfigurement, permanent injury, loss of a body function, and similar categories | Florida, Michigan, New Jersey, New York, Pennsylvania |
| Monetary | Defined by a dollar amount of medical expenses | Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota, Utah |
A verbal threshold turns on the nature of the injury. A monetary threshold turns on how much treatment cost, which means a modest injury with expensive treatment may clear it while a more serious injury treated cheaply may not.
Verbal thresholds have been interpreted broadly by courts in some states over time, which has shifted where the line sits in practice. This is one of several reasons to treat any general description as a starting point rather than an answer.
Choice no-fault
Three states let drivers choose. In New Jersey, Pennsylvania and Kentucky, motorists may reject the lawsuit threshold and retain the right to sue for any auto-related injury.
If you live in one of these states, you have made this choice, whether or not you remember making it. It is recorded in your policy selections and it affects both what you pay and what rights you hold after a crash. It is worth confirming which option you selected rather than discovering it after an injury.
What no-fault does and does not mean
Several persistent misunderstandings are worth clearing up.
It does not mean nobody is at fault. Fault is still determined. It governs property damage claims, it affects your rate, and it determines liability if the threshold is cleared.
It does not mean your rate is unaffected. Being at fault in a no-fault state still affects rating at renewal.
It does not cover your car. No-fault concerns injuries. Vehicle damage is handled through liability, collision or comprehensive exactly as it is elsewhere.
It does not mean unlimited medical coverage. PIP has limits, and once they are exhausted, the question of what pays next depends on your health coverage and on whether you can reach the at-fault driver.
How PIP and MedPay differ
Both pay for injuries to you and your passengers regardless of fault. They are not the same coverage.
Personal injury protection is broader. Depending on the state it may cover medical treatment, a portion of lost income, replacement services such as childcare or housekeeping while you recover, and funeral expenses. It is the centerpiece of a no-fault system.
Medical payments coverage is narrower, generally covering medical and funeral expenses only, with no wage replacement, and usually in smaller limits.
Which you can buy, which you must buy, and the available limits are all set by state. Some states require PIP, some require MedPay, some require insurers to offer one or the other, and some leave both optional.
Coordination with health insurance
In several PIP states you can choose whether your health plan or your auto PIP pays first. Selecting your health plan as primary generally reduces what you pay for PIP, but it makes your health plan's deductible, network rules and copays apply to treatment after a crash.
This is a genuine trade-off rather than an obvious choice, and it depends on how good your health coverage is. If you have a high-deductible health plan, coordinating PIP away may not be the saving it appears to be. Ask a licensed agent in your state what your options are.
What this means practically
If you live in a no-fault state: your own PIP is your first stop after an injury, so it is worth knowing your limit before you need it. Whether you can sue depends on your state's threshold. There are usually deadlines for submitting PIP claims, and they can be short.
If you live in a tort state: the at-fault driver's insurer is the main route, and your own MedPay, if you carry it, covers immediate expenses while liability is being sorted out. Your health insurance may pay in the meantime and assert a lien later.
Either way, uninsured and underinsured motorist coverage is what responds when the at-fault driver has nothing or not enough, which is covered in uninsured and underinsured motorist coverage.
If you move to another state, this is one of the things that changes. See life events that change your insurance.
These laws change
Connecticut repealed its no-fault law in 1993. Colorado's expired in 2003. Michigan substantially restructured its system in 2020, including changes to medical benefit selections. States amend thresholds, required limits and PIP structures with some regularity.
That is the argument for treating the lists above as a description of the landscape rather than a current legal authority. Your state's Department of Insurance is the source of record, and a licensed agent in your state can tell you what your policy selections actually are.
Related reading: car insurance coverage types, state minimum liability limits, and what to do after a car accident.
State classifications, thresholds, required coverages, filing deadlines and coordination options are set by state law and change over time. Nothing here is legal advice. Verify current rules with your state's Department of Insurance and discuss your own policy selections with a licensed agent. When you are ready, you can request auto insurance quotes and get connected with licensed providers who cover your area.