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What is No-Fault Insurance (aka Personal Injury Protection or PIP Insurance)?

Updated: November 2017

No-fault insurance is a type of car insurance coverage that helps pay for your and your passengers' medical bills if you're injured in a car accident, regardless of who caused the accident. This coverage is also known as personal injury protection, or PIP insurance.

PIP is not available in all states, but it is required in others.

Beginning in the 1970s, many U.S. states passed legislation to introduce "no-fault" auto insurance. According to the Insurance Information Institute (III), the goal was to simplify the process of determining which driver is responsible for an accident.

Map of the U.S. showing states that require or offer no-fault insurance.

What Does No-Fault Insurance/PIP Cover?

No-fault insurance helps cover medical and hospital bills if you or your passengers are injured in a car accident. After a covered accident, no-fault insurance also may help pay for:

  • Your health insurance deductible
  • Expenses that exceed your health insurance coverage limits
  • Lost income as a result of your injuries (not available in all states)
  • Essential services, such as child care or cleaning, that you may not be able to perform because of your injuries
  • Funeral expenses

No-Fault Insurance/PIP Coverage Limits

No-fault insurance has a coverage limit, which is the maximum amount your insurer will pay for a claim. In states where PIP is required, state laws dictate minimum coverage limits. You must purchase at least the minimum amount of PIP coverage required by your state. You may be able to purchase additional coverage to increase your PIP limits. Higher limits may be a good idea - if you or your passengers are injured in an accident, you may have to pay out of pocket for medical expenses that exceed your coverage limits.

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What Is Not Covered by No-Fault Insurance/PIP?

  • Damage to your vehicle.
    Collision coverage (if you've opted for it) helps pay to repair your car if it's damaged in a crash with another vehicle.
  • Damage to other people's property.
    If you're responsible for a car accident, your property damage liability coverage helps pay for damage you cause to another person's car or property (such as a fence or building).
  • Medical expenses that exceed your coverage limits.
    Medical bills or lost wages that exceed your coverage limits won't be reimbursed. However, Nolo.com says some no-fault insurance states offer an exception. You may be able to file personal-injury lawsuits against other drivers if they're responsible for seriously hurting you or someone else in your car, or if your medical bills exceed a certain dollar limit.

How Does No-Fault Insurance Work?

In states with no-fault insurance, if you're injured in an accident, your no-fault insurance/PIP may help pay for associated costs regardless of who's at fault, up to the limits you selected and subject to state law.

In states without no-fault coverage, typical insurance claims may be paid out as follows:

  • If you're injured in an accident caused by another driver:
    The at-fault driver's bodily injury liability coverage may help reimburse your medical expenses, up to the policy limits.
  • If you're injured in an accident you cause:
    Your medical payments coverage (if you've opted for it) may help reimburse your medical expenses, up to the limits you selected.

What States Require No-Fault Insurance/PIP Insurance?

As of June 2017, no-fault insurance/PIP is required in 16 states:

  • Arkansas
  • Delaware
  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Oregon
  • Pennsylvania
  • Utah

No-fault insurance/PIP is optional in:

  • District of Columbia
  • New Hampshire
  • South Dakota
  • Texas
  • Virginia
  • Washington
  • Wisconsin

Need help understanding your state's no-fault insurance coverage laws? Get in touch with local insurance agent, who can help you understand your options.

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This content is for informational purposes only and may not be applicable to all situations.

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