How no-fault insurance works

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You may be familiar with at-fault car insurance. If you’re in an accident with someone, the person who caused the accident is responsible for helping pay for damage done to your car—and in some cases—helping with medical bills. That person would file a claim with their insurance company. Most state laws operate on an “at-fault” basis. (These states are also known as tort states. No, it’s not a dessert.)

There are some states that use no-fault laws. If you’re from an at-fault state or are new to no-fault insurance, read on to learn more about the insurance requirements, if you need it, and what it means if you’re in an accident.

What is no-fault insurance?

In the 1970s, legislators introduced a new type of car insurance—no-fault insurance. It was meant to help accident victims avoid drawn-out court cases or other financial problems if the police weren’t able to figure out who was at fault for an accident. No-fault insurance has been repealed in many states (the most recent being Colorado in 2003).

So what does no-fault mean? Let’s say you’re in a car accident. In a no-fault state, you submit a claim to your car insurance company—even if the accident wasn’t your fault. You’re required to purchase Personal Injury Protection (or PIP*) coverage to help pay for medical expenses. In North Dakota, the state requires drivers to carry at least $30,000 in PIP coverage.

Three states—Kentucky, New Jersey, and Pennsylvania—operate as choice no-fault states. If you live in a choice state, you can choose if you have no-fault insurance or stick with traditional Liability coverage (used for at-fault insurance).

To break it down, here are the two definitions you need to know for this blog:

  • At-fault means the person who caused the accident is responsible for all parties involved
  • No-fault means everyone involved in the accident takes care of themselves

Who pays for car damage in no-fault states?

No-fault insurance deals with injuries, not property damage. So if your vehicle is damaged in an accident by another driver, that driver’s Liability Property Damage coverage would help with repairs.

Personal Injury Protection (required* in no-fault states, but available in select at-fault states) is used to help pay for medical expenses and injuries resulting from an accident. It does NOT cover:

  • Vehicle damage
  • Vehicle theft
  • Weather damage
  • Property damage

If you want insurance that can help cover your vehicle in these examples, you’ll need to add Collision and Comprehensive to your policy. We break down Collision and Comprehensive coverage in another blog post.

What do I get with Personal Injury Protection?

PIP helps cover the medical bills of you and your passengers (and in some states, pedestrians) if you’re involved in an accident. This insurance can also help cover:

  • Medical expenses resulting from the accident, which could include X-rays, hospital visits, rehabilitation or ambulance rides
  • Your health insurance deductible
  • Lost income as a result of the accident
  • Childcare expenses
  • Funeral expenses

Your insurance payout after a claim depends on the limits you chose for PIP coverage. The higher the limit on your policy, the more your insurance can cover when you file a claim. Before you choose a limit, you should know that the higher your limits, the more you pay for your policy.

Check out all of our car insurance coverage options.

Does PIP cover my pet in my car?

In short, no. Though PIP helps with medical expenses for passengers, it typically only counts for the humans in the car. Check your policy documents for more details on what’s covered under your insurance.

PIP vs. Medical Payments coverage

Both PIP and MedPay provide insurance coverage for health expenses after an accident. If you’re in Texas, you’re in the only state where you can purchase PIP and MedPay*. In that case, MedPay can be added to your policy to help with medical expenses after an accident and can be extra coverage in addition to PIP and your health insurance. If you’re in a state that requires PIP, you can’t purchase MedPay.

There are some differences in insurance coverage that you need to know:

  • PIP is required insurance in no-fault states but can be rejected in some states. MedPay is optional in all states except Maine and New Hampshire.
  • Unlike health insurance, MedPay doesn’t have a deductible or copay.
  • PIP doesn’t cover pain and suffering (typically based on minor injuries).

Check out our blog post on choosing the best PIP and MedPay coverage for you.

Personal Injury Protection (PIP) vs. Medical Payments (MedPay) comparison chart

*For Texas residents: Texas is an at-fault state and does not require PIP. As a Root customer, you’re eligible to purchase both PIP and MedPay.

Does a no-fault accident appear on my record?

It depends. More specifically, it depends on your state—and each state varies on its laws. In some cases, unless the police are called to the scene of an accident, you won’t see anything on your record. Check your state’s laws to learn more. You can also check your Motor Vehicle Report (MVR) to see if any recent accidents are on your record.

What if a driver in a no-fault state doesn’t have insurance?

If you’re in a no-fault state and are hit by an uninsured or underinsured driver, you still submit a claim through your own insurance company. You can purchase Uninsured and Underinsured Motorist coverage for additional protection. It’s illegal to drive without insurance in all states except New Hampshire.

Get no-fault insurance with Root

Driving without insurance isn’t worth the risk. If you’re looking for no-fault insurance, check out Root. Through technology in your smartphone and data from your driving habits, we base rates primarily on how people actually drive. The result is a more fair, more affordable, and much easier experience—all in an app. You can choose your coverage and update your policy in the app at any time. All Root customers get Roadside Assistance included with their policy and some special Lyft perks around the holidays*. Download the Root app today and see how much you can save on your car insurance.

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*PIP can be rejected in some states. Lyft perks not available in North Dakota.

Related blogs

How to choose Medical Payments, Personal Injury Protection & Uninsured Motorist coverage

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