No-Fault Car Insurance (PIP)

In general, most states provide that if you are injured during a car accident you have the right to make a claim against the other driver for negligence.

This requires proving the other driver was at fault, which can often be a long and drawn-out process with a lot of tedious paperwork, with no guarantee that the other driver's insurance company will pay your claim.

Because this is usually an expensive, frustrating process, several states have modified the way car insurance claims work. This is where insurance coverage known as "no fault" comes into play.

What Is No-fault Car Insurance?

Essentially, having no-fault insurance means that your insurance company will help cover any medical expenses due to an automobile accident, regardless of who is ultimately considered at fault. This type of coverage is also referred to as personal injury protection (PIP) coverage.

Most potential lawsuits become irrelevant when a “no-fault" system is in effect, so insurance companies are able to settle claims disputes quickly.

The following states require drivers to have "no fault" auto insurance:

  • District of Columbia.
  • Florida.
  • Hawaii.
  • Kansas.
  • Kentucky.
  • Massachusetts.
  • Michigan.
  • Minnesota.
  • New Jersey.
  • New York.
  • North Dakota.
  • Pennsylvania.
  • Utah.

The exact terms of coverage for each state are a bit different, so you should still contact your car insurance provider to determine whether there are limitations on the policy.

What Does This Type of Auto Insurance Cover?

PIP coverage is intended to give you prompt payment for any personal injury claims that come from a car accident. It also tends to lessen the chances of a lawsuit being filed, which may save you time and money in the long run.

General expenses covered by this insurance include:

  • Medical expenses.
  • Rehabilitation or physical therapy costs.
  • Loss of wages.
  • Funeral expenses.

These policies will not cover property damage, which means you may still be responsible for any property damage claims that are made. No-fault coverage also has limits, so the amount covered depends on your specific policy.

When Is a Lawsuit Still Possible?

Because the overall intention of PIP coverage is to simplify and speed up the claims process, there are very few cases where a lawsuit can be filed. However, every state has a vastly different way of handling no-fault auto insurance claims.

In general, lawsuits can be filed in cases of severe injury or death OR when medical costs far exceed the threshold limits for your state.

If you live in a state where this type of car insurance is optional, having no-fault protection can offer you peace of mind because you know your expenses will be covered in the event of an accident.