How Does a No-Fault Car Insurance Claim Work in the United States?

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In this article, we shall be discussing how no-fault car insurance works, the limits for stepping outside of no-fault and filing a claim against the at-fault driver, and no-fault and “personal injury protection” coverage as add-ons in liability states.

Insurance policy comes into play whenever there’s a car accident in the United States. In most states, the driver at fault in the accident is mandated by law to bear all the financial responsibilities for injuries and other losses incurred. Thus they do this through their own insurance company.

But in some states too, the car insurance process starts and often ends with a no-fault insurance claim made through your own coverage.

How No-Fault Car Insurance Works

Whether it’s the “fault-based car insurance system” or the “liability-based car insurance system,” in most states, when you are involved in a car accident, you have the option of bringing a claim for compensation against the driver that is at fault through the driver’s insurance provider.

Being a third-party claim, you have to convince the insurance company of the driver you had the accident with that it was their insurance policyholder that was at fault.

This might take a pretty long time to prove but if you have the following vital information like the police reports, statements of the witness(es), photographs, and probably a short video of the scene of the accident, and other forms of car accident evidence.

Despite all the no-fault car insurance evidence you may present, you can still be denied the claim by the other driver’s insurance company.

When you make a third-party claim and the insurance company of the other driver denies it, you can file a lawsuit.

The procedure for submitting an insurance claim if you live in any of the no-fault car insurance states is more streamlined. Instead of filing your claim to the negligent driver’s insurance provider, you submit your claim to your own insurance company.

How No-Fault Car Insurance Works

Your insurance company then pays compensation for certain financial losses related to your car accident injuries (the specifics of what’s covered vary from state to state), regardless of who caused the accident.

So, in making a no-fault car insurance claim, you don’t have to worry about whether the insurance company will deny your claim because of any dispute about the cause of the accident. You do not bear the burden of having to prove to the insurance adjuster that the fault of the accident lies with the other driver, and not you.


But the other side of the coin is that in a no-fault claim, you still aren’t guaranteed a settlement, and you’re limited in the kinds of compensation you can collect. Whereas in a third-party insurance claim or lawsuit against the at-fault driver you can recover “pain and suffering” damages on top of reimbursement for medical bills and lost income, “pain and suffering” and other “general” damages are not available in a no-fault car insurance claim.

Which Are the No-Fault Car Insurance States?

There are basically about ten no-fault car insurance states in the United States of America. 

In any of these states, an injured person in an accident must first turn to their own car insurance coverage for claims.

Remember, in these states, unless the circumstances of your car accident claim let you “step outside” of no-fault under the applicable threshold, you won’t be able to collect “pain and suffering” damages in connection with the accident and your injuries.


Below are the no-fault car insurance states:

  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • New York
  • North Dakota, and
  • Utah.

The District of Columbia, New Jersey, and Pennsylvania all follow a “hybrid” or “choice no-fault” system.

What Does a “Hybrid” or “Choice No-Fault” System Mean?

A hybrid or choice no-fault car insurance system means that a policyholder can decide whether you want to be insured under no-fault or a more traditional liability-based insurance system and you may have a choice to continue with no-fault before making a claim after an accident.

Some states (including Oregon and Delaware) require no-fault coverage as an add-on to any car insurance policy, but after an accident, there are no limitations on a claimant’s options for holding another driver or party financially responsible for damages. Check out this article that explained the things that are not covered by a car insurance policy.

States that have choice no-fault car insurance laws:

  • Kentucky
  • New Jersey
  • Pennsylvania

The following states have add-on insurance laws:

  • Arkansas
  • Delaware
  • Maryland
  • New Hampshire
  • Oregon
  • South Dakota
  • Texas
  • Virginia
  • Washington
  • Wisconsin

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