Is your state a no-fault state?

Why the no-fault distinction matters

In no-fault states, your own auto-insurance policy pays your medical bills under PIP (Personal Injury Protection) coverage regardless of who caused the crash. The trade-off is that you cannot sue the at-fault driver for pain and suffering unless your injuries cross a statutory "tort threshold" (typically permanent injury, significant disfigurement, or a medical-bill dollar floor).

In at-fault states, the at-fault driver's liability insurance is the primary source of payment. You sue (or threaten to sue) the at-fault driver for the full range of damages: medical bills, lost wages, and pain and suffering. Recovery is subject to the state's comparative-fault rule and the at-fault driver's policy limits.

The no-fault system reduces small-claim litigation volume but compresses case value for minor injuries. The at-fault system produces higher litigation volume but allows full pain-and-suffering recovery without crossing a threshold. Neither system is universally better; each makes different trade-offs.

Full state-by-state framework table

Minimum liability coverage requirements by state

Every U.S. state imposes a minimum liability coverage requirement on registered vehicles. The minimums are published in the format X/Y/Z, where X is per-person bodily-injury liability, Y is per-accident bodily-injury liability, and Z is property-damage liability. Florida's minimum (10/20/10) is among the lowest in the country; California's (15/30/5) is similarly low. New Hampshire is the only state without a statutory minimum, though drivers there must demonstrate financial responsibility through other means.

State minimums set the floor, not the ceiling. Many drivers carry only the minimum, which is why catastrophic-injury cases routinely exhaust the at-fault driver's liability policy and require recovery from the injured party's own UM/UIM coverage. Plaintiffs' attorneys verify the at-fault driver's policy limits within the first 30 days of the claim, because the answer determines whether the case is a "policy-limits case" (often quickly resolvable) or a multi-source recovery case requiring more procedural work.

Tort thresholds: the gateway to a full lawsuit in no-fault states

In a no-fault state, your own PIP coverage handles the medical bills and a portion of lost wages without anyone first proving fault. But PIP benefits cap out, and they do not include pain and suffering. To sue the at-fault driver for full damages, an injured party in a no-fault state must first clear a statutory "tort threshold." These thresholds vary substantially across no-fault jurisdictions.

Florida uses a "permanent injury" threshold: significant and permanent loss of an important bodily function, permanent injury within a reasonable degree of medical probability, significant and permanent scarring or disfigurement, or death. Michigan's threshold is even higher: a "serious impairment of body function" defined narrowly by case law. New York's threshold includes nine specific categories, the most heavily litigated of which is the 90/180-day test (injury that prevents customary activities for 90 of the first 180 days).

These threshold definitions drive an entire sub-genre of personal-injury litigation in no-fault states. Plaintiffs' attorneys focus heavily on developing the medical record to support threshold-crossing diagnoses; defense attorneys focus equally on independent medical examinations designed to undercut those diagnoses. The result is that no-fault states often have higher litigation volume on threshold disputes than at-fault states have on liability disputes , a counterintuitive outcome that no-fault reformers in the 1970s did not anticipate.