Car Accidents and No-Fault States

No-fault states offer no-fault laws for vehicle accidents, personal injury matters and divorce proceedings. In terms of divorce, no-fault means that individuals can file for divorce without showing cause. All states offer no-fault legal options for divorce, but specific grounds for divorce may vary from state to state. When referring to personal injury, vehicle accidents and auto insurance, no-fault pertains to insurance policies and compensation plans that are considered valid regardless of whether the claimant is at fault.

What Does It Mean to Be a No-Fault State?

For the driver, a no-fault state essentially means that if someone has an auto accident, their insurers pay for damages up to a specified limit, regardless of who caused the accident or who is at fault. In no-fault states, all drivers are generally required to carry PIP or personal injury protection policies, which help cover personal medical costs even when policyholders are at fault. 

What Is a Choice No-Fault State?

Choice no-fault or optional no-fault states are states in which drivers are allowed to opt out of their state's no-fault systems. Choice no-fault states include Kentucky, New Jersey and Pennsylvania. 

What Does an At-Fault State Mean?

In at-fault states, the insurance companies of each party involved in an accident generally cover the damages based on each party's degree of fault. For example, if a motorist runs a red light and it results in a collision with another vehicle, the motorist would be held responsible for the other party's medical bills and vehicle damage costs. 

No-Fault and At-Fault State Pros and Cons

No-fault and at-fault states each have pros and cons when it comes to insurance payouts, legal ramifications and penalties related to vehicle accidents. Here's a breakdown of the advantages and disadvantages of both.

Pros and Cons of No-Fault States

Pros: No-fault states generally allow for faster insurance claim payouts following auto accidents, and they also limit the number of lawsuits that motorists can file for minor injuries. This helps insurance companies save money on litigation proceedings. On top of medical bills, some no-fault insurance policies may also cover other expenses such as income continuation and child care, and vehicle damage is typically covered by the responsible party's property damage liability policy.

Cons: Motorists in no-fault states tend to have higher insurance premiums than those in at-fault states, and insurance rates can go up for both parties following an accident, regardless if one party is not at fault. Negligent drivers in no-fault states typically face fewer insurance penalties following accidents that result in the injury of another driver, and parties can usually only file lawsuits against negligent drivers if they sustain significant injuries or vehicle damage. 

Pros and Cons of At-Fault States

Pros: In at-fault states, negligent, at-fault drivers are held liable for any damages and injuries sustained following vehicle accidents, and their insurance should cover medical bills and vehicle repair costs. Motorists in at-fault states who aren't at fault when an accident occurs usually don't have to worry about increased insurance premiums or penalties.

Cons: While negligent drivers in at-fault states are generally held liable by the court system for damages and medical bills of the other parties, it can take time for the at-fault parties and their insurance companies to pay out claims. In at-fault states, any compensation received by the victim is based on the negligent party's ability to pay and overall insurance coverage. If an at-fault party is underinsured or uninsured, this can lead to a lower payout or no payout at all, regardless of the court's ruling. 

How Does Driving in a No-Fault State Affect Your Car Insurance?

On top of standard auto insurance policies, motorists in no-fault states are typically required to purchase PIP (personal injury protection) policies to cover medical costs if vehicle accidents should occur. A driver in a no-fault state must file a claim with their own insurer in the event of a vehicle accident, and the insurance laws in most no-fault states may also prevent injured parties from filing lawsuits against negligent drivers unless the damages fall within predetermined monetary thresholds.

How Does Driving in an At-Fault State Affect Your Car Insurance?

In at-fault states, the insurance companies of motorists who are responsible for accidents must usually pay out claims for the victim's vehicle damage and medical costs. Insurance companies in at-fault states indemnify the individuals who cause the accidents and typically pay out up to the specific policy limits. Responsible parties in at-fault states should also expect raised insurance rates. 

How Do No-Fault State Driving Laws Impact You If You Get Into a Car Accident?

Individuals who get into car accidents in no-fault states can usually expect claims to be paid out faster than in at-fault states because fault does not matter in terms of payment. No-fault insurance policies pay for medical costs and certain related expenses regardless of fault, and all drivers in no-fault states are required to carry first-party coverage. This means that motorists cannot sue one another for additional compensation unless their medical expenses exceed a certain threshold. The threshold can vary per state, but it's usually around $1,000. 

How Do At-Fault State Driving Laws Impact You If You Get Into a Car Accident?

In at-fault states, a motorist's car insurance premiums can go up by as much as 48% on average following their first accident if they are determined to be at fault. Drivers who aren't at fault but involved in vehicle accidents in certain at-fault states may see their insurance rates go up by approximately 12%. However, states such as California and Oklahoma don't allow insurance companies to raise premiums for not-at-fault drivers. 

At-Fault States

The states with at-fault insurance laws are as follows:

• Alabama

• Alaska

• Arizona

• Arkansas

• California

• Connecticut

• Delaware

• District of Columbia

• Georgia

• Idaho

• Illinois

• Indiana

• Iowa

• Kansas

• Louisiana

• Maine

• Maryland

• Mississippi

• Missouri

• Montana

• Nebraska

• Nevada

• New Hampshire

• New Mexico

• North Carolina

• Ohio

• Oklahoma

• Oregon

• Rhode Island

• South Carolina

• South Dakota

• Tennessee

• Texas

• Vermont

• Virginia

• Washington

• West Virginia

• Wisconsin

• Wyoming

No-Fault States

The states with no-fault insurance laws are as follows:

• Florida

• Hawaii

• Kansas

• Kentucky (Choice No-fault)

• Massachusetts

• Michigan

• Minnesota

• New Jersey (Choice No-fault)

• New York

• North Dakota

• Pennsylvania (Choice No-fault)

• Utah