No-fault insurance
No-fault insurance is auto coverage that pays covered medical expenses, lost wages and related injury losses through the applicable insurer without first deciding who caused the accident. It usually comes through personal injury protection, or PIP. It generally does not pay for vehicle damage, and state law sets the limits, claim deadlines and lawsuit rights.
Also called: no fault, choice no-fault
After a car accident in a no-fault state, your injury bills go to your own insurer first, and nobody has to settle who caused the crash before benefits start. The coverage pays economic losses such as medical care and lost wages up to a set limit. Repairs to your car are handled separately, through collision coverage or the other driver's liability coverage. Whether no-fault applies at all depends on where you live: New York has it, and Connecticut does not.
How a no-fault claim pays
In a no-fault state, your own insurance company pays for injuries to you and your passengers regardless of who is at fault, according to the NAIC (opens in a new tab). New York defines basic economic loss as up to $50,000 per person under Insurance Law § 5102 (opens in a new tab), and pays lost earnings at 80%, up to $2,000 a month, according to the New York Department of Financial Services (opens in a new tab). The claim below uses illustrative expenses against those rules.
Hover or tap a row to highlight it.
| Step | Amount |
|---|---|
| Medical and rehabilitation expenses | $10,000 |
| Lost earnings for one month ($2,000 times 80%) | $1,600 |
| Household help and transportation | $300 |
| Total covered economic loss ($10,000 plus $1,600 plus $300) | $11,900 |
| Basic limit still available ($50,000 minus $11,900) | $38,100 |
Your applicable no-fault insurer generally pays the $11,900, subject to proof, medical necessity, fee schedules, offsets and policy conditions. Vehicle repairs, pain and suffering, and anything above the limit are outside this math. In New York, no-fault benefits are primary to health insurance for covered auto injuries.
Limits, add-ons and lawsuit choices
The limit on your declarations page is the first thing that changes what you receive. New York's basic limit is $50,000 per person, and additional PIP is optional coverage that adds injury benefits once basic benefits run out. New York's basic benefits also include up to $25 a day for up to one year for necessary expenses such as household help and transportation to medical care, wage payments for up to three years subject to offsets, and a $2,000 death benefit on top of the $50,000.
States also differ in how no-fault interacts with lawsuits. In choice no-fault states such as New Jersey, Pennsylvania and Kentucky, you can pick a no-fault option with lawsuit restrictions or a traditional tort option. Limiting lawsuit rights can reduce liability premiums, according to the NAIC's regulator's introduction to the insurance industry (opens in a new tab), though the actual price depends on the state, insurer and coverages chosen. In add-on states, PIP sits on top of a fault-based system and generally does not restrict lawsuits the same way.
No-fault is a separate idea from full coverage, an informal phrase that often means liability plus collision and comprehensive. A policy can carry PIP without collision coverage, and full coverage does not mean unlimited medical benefits.
Where the term appears
No-fault is mainly an auto insurance term. On paper it may read as personal injury protection, PIP, No-Fault benefits, medical expense and wage-loss coverage, basic economic loss, or additional PIP. Workers' compensation is also a no-fault system, but it covers workplace injuries, not ordinary auto accidents.
You will see it on quotes, binders, declarations pages, renewal notices, endorsements, claim forms and state-required consumer notices. The declarations page shows your limit, while the endorsement and state law decide who is covered, which losses count and the claim deadlines.
How New York and Connecticut differ
New York requires first-party benefits for basic economic loss without regard to fault under Insurance Law § 5103 (opens in a new tab). Insurance Law § 5104 (opens in a new tab) limits lawsuits over basic economic loss and allows recovery for non-economic damages only after a serious injury. Written notice of a claim generally must be given as soon as reasonably practicable and no later than 30 days after the accident, unless you give a reasonable justification, under Regulation 68 (11 NYCRR Part 65) (opens in a new tab). In New York, you generally file with the insurer of the vehicle you were in, or the striking vehicle's insurer if you were a pedestrian.
Connecticut repealed its auto no-fault law through Public Act 93-297 (opens in a new tab), effective January 1, 1994; the old system required $5,000 in basic benefits, according to a Connecticut General Assembly report (opens in a new tab). Today a person hurt by another driver's negligence generally claims against that driver's bodily injury liability coverage. Connecticut requires liability limits of $25,000 per person and $50,000 per accident for bodily injury, $25,000 for property damage, and at least $25,000/$50,000 in uninsured and underinsured motorist coverage, according to the Connecticut Insurance Department (opens in a new tab). Our guide on whether you need uninsured motorist coverage covers that side.
Questions to ask an agent or insurer
Ask these when you choose a limit or start a claim.
- What is my no-fault or PIP limit, and is it per person, per accident or another unit? A limit is a cap, not unlimited medical coverage.
- Which people and accidents are covered, including household relatives, passengers, pedestrians, out-of-state accidents and rideshare use? New York sets different rules for each, and other states vary.
- What expenses are covered, and what limits, offsets, deductibles or fee schedules apply to medical care, wage loss, household help and transportation? These decide what part may stay your responsibility.
- What is the deadline and procedure for reporting an injury claim? New York generally requires written notice within 30 days, and other states may differ.
- Does this coverage pay for vehicle damage, or do I need collision, comprehensive or a property damage liability claim? No-fault generally covers injuries, not repairs.
Frequently asked questions
These come up after a claim or a move between states.
Does no-fault insurance mean I was not at fault?
No. It means covered injury benefits can be paid without first deciding fault. Fault still matters for liability claims, vehicle damage and lawsuits, and New York permits a surcharge for an at-fault bodily injury occurrence under specified rules, according to a DFS circular letter (opens in a new tab).
Who pays to fix my car in a no-fault state?
Your collision coverage or the at-fault driver's property damage liability coverage. Vehicle damage generally remains a claim against the at-fault driver's insurer, according to the NAIC consumer guide to auto insurance (opens in a new tab).
Which states have no-fault laws?
Twelve states and Puerto Rico, according to the Insurance Information Institute (opens in a new tab): Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah. Some use a verbal threshold for lawsuits, such as New York, and others a monetary one, such as Massachusetts.
Can a not-at-fault accident affect my renewal in Connecticut?
Connecticut prohibits nonrenewal based on a first or second qualifying not-at-fault accident, according to Connecticut Insurance Department Bulletin PC-46 (opens in a new tab).