Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Written by Rachael Brennan
Licensed Agent for 15 Years Rachael Brennan

Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Jun 21, 2022

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Key takeaways...

  • You can live in a no-fault insurance state, but you can’t buy a no-fault car insurance policy
  • Only 13 states have no-fault car insurance laws
  • In a car accident, no-fault car insurance covers the driver, passengers, the vehicle, and the other driver (etc.) involved

No-fault car insurance is a way to avoid having to prove fault in a car accident. Insurance companies are expected to settle the costs once fault is determined afterwards. Only around a dozen states have some form of no-fault car insurance laws, while most operate under the tort system.

No-fault car insurance helps drivers by avoiding the question of who was at fault for almost all car accidents of minor damage. In tort law states, fault would determined by a police report or other investigation. For drivers, this means your claim gets processed and paid immediately based on the coverage you paid for. You don’t have to wait for insurers to investigate to make sure the other party was at fault before paying your claim. The pros of no-fault car insurance are:

  • Quicker claims processing for policyholders
  • Less of a strain on the legal system
  • (Arguably) Lower car insurance rates

No-fault car insurance is not a form of insurance coverage, but a set of laws set up to help drivers and insurance companies work together and avoid the hassles of litigation for minor accidents. It speeds up the process to get claims paid and drivers back on the road.

You can live in a no-fault car insurance state, but you cannot buy a no-fault car insurance policy.

Do you want to avoid costly auto insurance that doesn’t fully cover you? Enter your ZIP code above and compare at least three to four policies to find better coverage today!

What states have no-fault car insurance laws?

Currently, only a small list of states have no-fault car insurance laws including:

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

It’s important to know that in New Jersey, Pennsylvania, and Kentucky drivers are allowed an option to choose between traditional car insurance coverage and no-fault auto insurance.

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How does no-fault car insurance work?

In most accidents — where no-fault car insurance laws are in place the process is pretty simple.

In the event of an accident, your car insurance company will pay for any damage caused to you, your passengers, and your vehicle regardless of who was “at fault.”

Coverage for a car accident also applies to the other driver. Essentially, each car insurance company will pay for claims pertaining to the parties they have insured. If their investigation determines you were not at fault, your insurance company would recover the claim paid from the other side’s insurance. While it’s wise to have collision, comprehensive, and especially personal injury protection in tort states as well, you should at least have PIP in no fault states. This way, you can be sure your medical expenses will be covered under the benefits of no-fault laws.

Each insurance company sharing the coverage helps the claims process enormously and eliminates expensive litigation in many cases. If you’re dealing with your insurance company, they’re more likely to be able to easily pull up your policy and make the process as seamless as possible. If there is a lawsuit, drivers are essentially signing their right to sue over to their auto insurer in a no-fault state.

While a driver can still sue for many reasons such as extreme negligence or severe financial reasons, most car accidents in no-fault car insurance states are quickly processed and drivers enjoy a hassle-free experience. State minimum liability insurance typically covers a small accident if you’re at fault. It’s still advisable to carry higher liability amounts and personal injury protection. Unfortunately, if the damages you cause far exceed your liability coverage, you could still be held personally responsible for the difference.

If you’re looking for better and more affordable coverage, enter your ZIP code below and start comparison shopping today!