PolicyZenPolicyZenIn most states, if someone hits your car and injures you, you file a claim against their liability insurance. In 12 states, it works completely differently. Your own insurance pays your medical bills first — regardless of who caused the accident. This is no-fault auto insurance, and understanding it matters if you live in one of these states or move between them.
The driver who caused the accident is responsible for damages. The at-fault driver's liability insurance pays for the other driver's medical bills, lost wages, and pain and suffering. You can sue the at-fault driver for damages above their policy limits. Your own insurance only pays if you carry collision or MedPay/PIP coverage voluntarily.
Each driver's own Personal Injury Protection (PIP) coverage pays their own medical bills and lost wages — regardless of fault. You cannot sue the other driver for minor injuries unless you exceed a threshold (dollar amount or injury severity). The goal was to reduce litigation and speed up claim payments. In practice, the results have been mixed.
| State | System | Key Notes |
|---|---|---|
| Florida | No-Fault | Requires $10K PIP; one of the most fraud-prone systems in the US; reform ongoing |
| Michigan | No-Fault | Reformed 2020; previously had unlimited PIP (most generous in US); now tiered options |
| New York | No-Fault | Requires $50K PIP; serious fraud problem especially in NYC metro |
| New Jersey | Choice | Can choose no-fault or tort; lower premium if you choose limited tort |
| Pennsylvania | Choice | Can choose limited or full tort; full tort preserves right to sue for pain and suffering |
| Kentucky | Choice | Can reject no-fault in writing; must do so proactively |
| Hawaii | No-Fault | Requires $10K PIP; relatively low premiums |
| Kansas | No-Fault | Requires $4,500 PIP minimum |
| Massachusetts | No-Fault | Requires $8,000 PIP; can still sue for serious injuries |
| Minnesota | No-Fault | Requires $40K PIP ($20K medical, $20K wage loss) |
| North Dakota | No-Fault | Requires $30K PIP |
| Utah | No-Fault | Requires $3,000 PIP; can sue if medical expenses exceed $3,000 |
| All others | Fault/Tort | At-fault driver's insurance pays the injured party's damages |
Michigan deserves special attention. Until 2020, Michigan had the most generous no-fault system in the country — unlimited lifetime medical benefits for auto accident injuries. If you were catastrophically injured in a car accident, your auto insurance had to pay for your medical care for the rest of your life, no cap.
The result: Michigan had the highest auto insurance premiums in the United States, often $3,000–$5,000/year in Detroit. A cottage industry of clinics, home care agencies, and attorneys exploited the unlimited PIP system. Fraud was endemic.
In 2019, Michigan passed major reform legislation. Drivers can now choose their PIP coverage level — unlimited, $500K, $250K, $50K, or (if they have qualifying health insurance) opt out of PIP entirely. Premiums dropped significantly after the reform took effect in 2020, though fraud and cost issues persist.
This is where people get caught off guard. Auto insurance is state-specific. When you move from a fault state to a no-fault state (or vice versa), your coverage requirements and protections change fundamentally.
When you move to a new state:
Upload your auto insurance policy to PolicyZen. Ask about your PIP coverage, uninsured motorist limits, or what happens if you're in an accident — get answers from your actual documents.
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