No-fault auto coverage, sometimes referred to as “personal injury protection” (PIP), was developed as a means of avoiding the lengthy, sometimes tedious process of determining who was at fault, and therefore had to pay damages, for an auto accident. In exchange for a near-guarantee of swift payment from their own insurer, drivers would essentially waive their right to pursue legal action against other auto owners involved in the collision. Implementing this type of system exactly as described, sometimes called “pure no-fault” coverage, would pose a number of legal and constitutional challenges, so no one state has implemented a “pure no-fault” system. However, twelve U.S. states plus Puerto Rico have adopted some form of a no-fault system for auto coverage: modified, choice, or add-on.

The chart below focuses on how each system treats an accident victim’s right to sue other drivers, the priority of coverage and whether it may be subrogated, the different options available for coverage limits, what benefits are and are not included, the effect on the policyholder’s deductible, and when it is acceptable for an insurer to decline or exclude no-fault coverage.

For a fuller, more detailed explanation of no-fault auto coverage, take a look at the article No-Fault Auto Insurance - An Overview on the FC&S website.