No-fault laws are statutes (laws) enacted by state legislatures (elected representatives) that limit a motor vehicle driver’s ability to seek recovery from a negligent driver for personal injuries and property damage.

No-fault laws are based on the idea that all drivers are required to have insurance coverage for their own personal injuries and property damage sustained in motor vehicle accidents. These laws are designed to reduce the number of lawsuits for personal injuries and property damage sustained in motor vehicle accidents.

No-fault laws vary from state to state in the states that have some form of these laws. No-fault laws usually require a driver who sustains personal injuries and property damage in a motor vehicle accident to recover the losses from the driver’s own insurance company (insurer) through Personal Injury Protection (PIP) coverage. Noneconomic damages such as pain and suffering are usually not recoverable in no-fault states.

In some states a driver or passenger who has sustained personal injuries and property damage may file a mini-tort claim with the negligent driver’s no-fault insurance carrier and receive a limited amount of proceeds (money) to cover the losses. And in some state's the injured driver's insurance company (insurer) may require the injured driver to file a mini-tort claim with the negligent driver's no-fault insurer.

But if a driver or passenger in a motor vehicle accident suffers severe and permanent personal injuries (known as the tort liability threshold) they may be able to file a lawsuit against the negligent driver that caused the accident. The tort liability threshold may be defined in descriptive terms such as “death or significant disfigurement” (known as the verbal threshold) or in monetary terms (a dollar amount of medical bills known as the monetary threshold).

And if a claim exceeds the tort liability threshold in a no-fault state the injured driver or passenger may be able to recover noneconomic damages (pain and suffering, etc.) as well.

Laws are subject to change at any time and may vary from state to state, but jurisdictions (states and the District of Columbia) with some form of no-fault laws include:

• District of Columbia

• Florida

• Hawaii

• Kansas

• Kentucky

• Massachusetts

• Michigan

• Minnesota

• New Jersey

• New York

• North Dakota

• Pennsylvania

• Utah

California does not have no-fault laws for auto insurance. Instead, California operates under a traditional fault-based system, also known as a tort liability system. Under this system, the driver who is found to be at fault for an accident is responsible for paying the damages of the other parties involved. Drivers in California are required to carry minimum liability insurance to cover bodily injury and property damage they may cause to others in an accident. The minimum coverage amounts are $15,000 for injury/death to one person, $30,000 for injury/death to more than one person, and $5,000 for damage to property. Victims of an auto accident in California have the right to file a claim against the at-fault driver's insurance, file a lawsuit for their losses, or use their own insurance coverage if they have uninsured/underinsured motorist protection. The option to sue for noneconomic damages such as pain and suffering is not limited by any no-fault laws in California.