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Reviewed by Daniel Walker
Licensed Car Insurance Agent Daniel Walker

UPDATED: Mar 15, 2022

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The Short of It

  • Personal injury protection car insurance is required in no-fault states and is often referred to as no-fault insurance

  • No-fault states frequently experience fewer accident-related legal proceedings because of the additional personal injury protection insurance required

  • Insurance premiums may rise for non-fault claims, but they will not increase as much as a driver’s premiums in an at-fault state

Living in a no-fault state has its advantages and disadvantages. Therefore, it can be difficult to decide whether living in a no-fault state is better for auto insurance than residing in an at-fault, or tort, state. However, there are some positives to living in a no-fault state, especially when considering insurance premiums.

A no-fault state does not declare one party at fault in an auto accident. Instead, both parties involved in the incident make claims with their car insurance company, with no regard for whomever caused the accident.

All drivers in no-fault states must have personal injury protection car insurance on their policy. Personal injury protection insurance is often called PIP insurance or no-fault insurance, due to its correlation with no-fault states.

Because a no-fault state requires more insurance, the benefits of residing in a no-fault state include having more protection, less out-of-pocket costs, and payment for all medical expenses and wages lost due to injury. In addition, claims are expedited, and payouts happen quickly, indicating that lawsuits do not typically proceed for minor accidents, and injuries are compensated via medical funds through insurance.

Knowing whether you live in a no-fault state is the first step in discovering what coverage you need. However, we are here to help you put the rest of the pieces together. Enter your ZIP code into our free car insurance comparison to discover the best estimates for you.

What does a no-fault state mean for auto insurance?

No-fault states have the benefit of additional auto insurance. However, many drivers may not know what it means for consumers. In some scenarios, you may see your premiums rise after submitting a non-fault claim to your car insurance company.

However, non-fault claims are notoriously easier and more predictable than other claims. While you may experience a rise in premiums following major no-fault accidents, you may also receive payout money for medical expenses or lost wages much quicker than that of at-fault, or tort, states. Typically, insurance premiums will not rise in no-fault states unless the car accident was significant, caused severe damage, or involved a negligent driver.

In tort states, or in states where one driver is at fault for an auto accident, the at-fault driver must pay for all medical expenses, lost wages, and damages caused to the other driver. In no-fault states, your premiums may rise after an accident, but the car insurance company will handle the cost of all damages and other expenses resulting from an auto incident.

However, if damages, lost wages, or medical expenses exceed the limits of your policy, you may be responsible for paying these exceeding costs. The minimum requirement for personal injury protection in no-fault states is $10,000, but this amount can become quickly expended, and you may accumulate more expenses than the amount provided by the insurance company.

For consumers, a no-fault state indicates that you will not have to pay your deductible amount to cover accident charges. However, you may be liable for a portion of the total cost. Your auto insurance company will outline these terms in your policy, and they can provide details about the charges for which you are responsible.

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No-Fault States and the Future of Car Accidents in America

No-fault states include Florida, Hawaii, Kentucky, and Pennsylvania, among other locations. The total number of insured drivers in those states stretches well beyond several tens of millions, making no-fault states home to some of the best insured drivers.

While some may not enjoy living in a no-fault state because there can be ambiguity as to who caused a crash, there is no doubt that no-fault states remain a light in the future of American driving. With more insurance coverage, more efficient car insurance payouts, and better care for medical needs and lost wages, no-fault states seem to be moving in a direction that many states are willing to follow.

No-fault states have more car accident insurance, taking the burden of paying for damages away from other drivers and, instead, relying on insurance companies for assistance. Additionally, no-fault states are states with low premiums for auto insurance. Alongside discounts and bundling, no-fault states make submitting claims and car accident aftermath less stressful by eliminating the blame.

The blame associated with other drivers in at-fault states can make car accidents more tense and hinder a discussion of the specific details concerning what happened. Due to this recrimination, many drivers may be less solution-oriented about damages and medical expenses and more interested in blaming others for the new issue.

No-fault states erase the need for blame and maintain an outcome mindset by having both parties exchange insurance information and submit claims while simultaneously requiring all drivers to have coverage for personal injury protection.

5 Reasons Why You Should Be Looking at No-Fault States if You Are Considering an Auto Policy Change

Driving in no-fault states has many advantages. There are only 12 no-fault states, but you may be willing to move if it means reaping the many rewards of a no-fault state. The following list of benefits makes the decision to pursue a state and policy change simple.

No-Fault States Require More Coverage

Because no-fault states require drivers to purchase personal injury protection insurance, or no-fault insurance, motorists in no-fault states have more coverage than other drivers. The minimum amount of coverage for which no-fault insurance provides relief is up to $10,000 worth of medical expenses or charges related to the accident.

No-Fault Insurance Can Cover Medical Bills, Childcare Expenses, and Lost Wages

No-fault insurance does not stop at providing medical care. No-fault insurance, or personal injury protection, can cover childcare costs and lost wages alongside medical bills and other necessities.

Lawsuits and Legal Proceedings Are Less Likely in No-Fault States

No one is declared at fault in an auto accident in no-fault states. This lack of blame means legal proceedings are less likely to occur. Additionally, insurance companies in no-fault states often do not waste time negotiating with the other driver’s insurance company, saving time and money.

No-Fault States Have Quicker Insurance Payouts

Car insurance companies for drivers in no-fault states save a lot of time because they do not have to worry about negotiation and litigation. Saved time means payouts happen quicker, and these payouts occur much faster than those in at-fault states.

A Non-Fault Claim Will Only Raise Premiums Marginally

Claims in a no-fault state can raise premiums, but usually, the increase is not substantial. These rising premiums are almost always much less than any premium increase in an at-fault state. Any premium increase in a no-fault state would be less than the increase that a driver from an at-fault state will experience due to a car accident.

No-Fault States Are Better For Policyholders

While you may see your premiums rise after a severe auto accident, the benefits of living in a no-fault state can be significant. Not only do legal proceedings and lawsuits happen less in a no-fault state, but claims and medical expenses payouts are offered in less time. This emphasis on solutions and outcomes alleviates an enormous amount of stress after an accident.

With the required personal injury protection insurance of no-fault states, you can expect your medical expenses to be covered. In addition, you can also anticipate compensation for lost wages, childcare expenses, and a broad spectrum of other services that you may need as a result of an auto accident.

No-fault insurance and a no-fault setup are the future of America. If you are seeking a change in policy and scenery, you may wish to consider one of the 12 no-fault states in the U.S.

To view the best estimates for no-fault insurance on the market, enter your ZIP code into our free car insurance comparison tool to determine which company is best for you.