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

Iowa does not have no-fault auto insurance laws. Instead, Iowa operates under a traditional 'tort' or 'at-fault' system, which means that the driver who is found to be responsible for causing a motor vehicle accident is liable for the damages incurred by other parties. In this system, injured parties have the right to file a claim against the at-fault driver's insurance company or pursue a personal injury lawsuit to seek compensation for medical expenses, lost wages, property damage, and potentially pain and suffering. Iowa law requires drivers to carry minimum liability insurance to cover damages they may cause to others in an accident, but there is no requirement for Personal Injury Protection (PIP) coverage as found in no-fault states. The state's financial responsibility law mandates that drivers have coverage of at least $20,000 for bodily injury to or death of one person in an accident, $40,000 for bodily injury to or death of two or more persons in an accident, and $15,000 for property damage. If an injured party's damages exceed the at-fault driver's insurance limits, the injured party may seek additional compensation through their own insurance policy's underinsured motorist coverage or through legal action.