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

In New Jersey, no-fault laws require drivers to carry Personal Injury Protection (PIP) coverage as part of their auto insurance policy. This coverage allows a driver to file a claim with their own insurance company for medical expenses, lost wages, and other out-of-pocket costs after an accident, regardless of who was at fault. New Jersey's no-fault system limits the right to sue for pain and suffering unless the injury meets a certain threshold. This threshold is defined under New Jersey law as a 'verbal threshold' that includes death, dismemberment, significant disfigurement or scarring, displaced fractures, loss of a fetus, or a permanent injury within a reasonable degree of medical probability, other than scarring or disfigurement. An individual may also choose a 'monetary threshold' option for their PIP coverage, which allows for a lower premium but restricts the right to sue for pain and suffering unless medical expenses exceed a certain dollar amount. If injuries are severe enough to meet the tort liability threshold, the injured party may pursue a claim against the negligent driver for non-economic damages, such as pain and suffering.