Is No-Fault Insurance Optional?

No-fault insurance is optional. Most no-fault states require no-fault insurance, but no-fault insurance is optional in Kentucky, New Jersey, and Pennsylvania. If you opt-out of no-fault insurance coverage, you must choose a traditional policy. Start comparing auto insurance quotes with our free tool below to find the best rates on your no-fault car insurance coverage.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Nov 12, 2020

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Certain states in America are no-fault states. In states with no-fault insurance systems, your insurance company will pay for certain damages up to a specified limit in an accident, regardless of fault.

No fault insurance systems differ from tort insurance systems, where fault needs to be determined after every accident.

Is no-fault insurance optional? Do you need to buy no-fault insurance if you live in a no-fault state?

In certain states, drivers can choose whether to participate in the fault or no-fault insurance system. In other states, drivers must buy no-fault car insurance.

Today, we’re highlighting which states are considered no-fault states, which states are considered at-fault states, and which states are considered ‘choice no-fault’ states.

No-Fault Versus At-Fault Car Insurance

There are pros and cons to both at-fault and no-fault car insurance systems. Many states switched to no-fault car insurance systems in the 1970s and 1980s due to rising insurance fraud and insurance costs. Today, many of these states are considering switching back to at-fault systems due to these same concerns.

Key differences between the two car insurance systems include:

  • No-fault insurance covers your medical costs regardless of who is at fault for the car accident
  • With no-fault car insurance, you can receive compensation from your car insurance company immediately instead of waiting for the insurance companies to determine fault
  • With at-fault car insurance, investigators at either insurance company may negotiate for months to determine which driver was at-fault, or which driver was more at-fault, delaying payout even further

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No-Fault States

Most states use tort liability insurance systems, where fault needs to be determined after every accident. 12 states, however, have adopted no-fault insurance systems where your insurance company will pay after every accident, regardless of fault.

No-fault states include:

  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Pennsylvania
  • Utah

Puerto Rico also uses a no-fault insurance system.

No-fault insurance requirements can vary widely between the above states. Some states require personal injury protection (PIP), property protection (PPI), and additional insurance policies, for example. Several of the above states – including Michigan and Florida – also have notoriously high insurance costs compared to other states.

Tort Liability States

All other states not listed above are considered tort liability states – or ‘at-fault’ states. In these states, fault must be determined after each accident – even if the fault turns out to be 50/50 between both drivers.

Some of the states listed below are also considered choice no-fault states, which means drivers have the choice to participate in the no-fault or at-fault insurance system. Other states are considered add-on states because drivers can add no-fault-style insurance policies like personal injury protection (PIP), which pays out after every accident regardless of fault.

States that use tort liability car insurance systems include:

  • Alabama
  • Alaska
  • Arizona
  • Arkansas
  • California
  • Colorado
  • Connecticut
  • Delaware
  • Georgia
  • Idaho
  • Illinois
  • Indiana
  • Iowa
  • Louisiana
  • Maine
  • Maryland
  • Mississippi
  • Missouri
  • Montana
  • Nebraska
  • Nevada
  • New Hampshire
  • New Mexico
  • North Carolina
  • Ohio
  • Oklahoma
  • Oregon
  • Rhode Island
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Vermont
  • Virginia
  • Washington
  • West Virginia
  • Wisconsin
  • Wyoming

Choice No-Fault States

In choice no-fault states, drivers can choose a no-fault car insurance policy or a traditional tort liability insurance policy. This hybrid system is rare. It’s only found in three states, including:

  • Kentucky
  • New Jersey
  • Pennsylvania

New Jersey and Pennsylvania have a verbal threshold for no-fault insurance claims, while Kentucky has a monetary threshold.

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Add-On States

Finally, some states are considered ‘add-on’ states. In these states, drivers can carry a personal injury protection (PIP) car insurance policy and get covered by their own insurance company even if the other driver is at-fault.

You might want to add PIP car insurance to your policy if you want guaranteed medical coverage immediately after an accident while fault is still being determined.

With some car accidents, for example, drivers may wait months for payment because insurance companies are negotiating over which person is more at-fault.

In the following add-on states, drivers can add no-fault-style car insurance coverage to their policy, but they’re never required to do so:

  • Arkansas
  • Delaware
  • Washington DC
  • Maryland
  • New Hampshire
  • Oregon

Is No-Fault Insurance Optional?

No-fault car insurance is not required in most states in America. 12 states, however, require you to have no-fault car insurance, and 4 additional states require you to have personal injury protection (PIP) coverage.

States Where No-Fault Insurance is Mandatory

If you live in the twelve no-fault states listed above, then no-fault insurance is not optional. Drivers in Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah are all required to have no-fault insurance to legally drive on the road.

States Where PIP Insurance is Mandatory

Certain states use no-fault systems, but still require drivers to maintain PIP coverage.

Drivers in Arkansas, Delaware, Maryland, and Oregon are required to have personal injury protection (PIP coverage).

States Where No-Fault Insurance is Optional

No-fault car insurance is optional in certain other states, including New Hampshire, South Dakota, Texas, Virginia, Washington, Wisconsin, and Washington DC. Drivers can choose to participate in the no-fault car insurance system or not.

In all other states, no-fault insurance is optional.

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