Most states have adopted a fault-based, or “tort liability,” system of auto insurance. In a fault-based system, insurance companies pay according to each party’s degree of fault. If you and your insurer don’t see eye-to-eye on your claim, you may have to file suit for uncompensated economic damages and pain and suffering.

The following states have fault-based insurance laws:

Tort Liability/Fault-Based States:

Alabama Alaska Arizona California Colorado Connecticut Georgia Idaho Illinois Indiana

Iowa Louisiana Maine Mississippi Missouri Montana Nebraska Nevada New Mexico

North Carolina OHio Oklahoma Rhode Island South Carolina Tennessee Vermont West Virginia Wyoming

No-Fault States: Because the tort (lawsuit) system has led to long and costly court battles over who was at fault and to what degree, policymakers in many states decided to change from a fault-based system to some form of a no-fault system.

Under no-fault automobile insurance laws, the good driver does not have to prove that the crash was somebody else’s fault before getting his money. His insurance company picks up medical bills, rehabilitation costs, and lost wages, up to the amount he purchased. The tradeoff is the injured person cannot sue the other driver for pain and suffering, emotional distress and inconvenience. (If you live in a no-fault state, the no-fault portion of your auto insurance policy is usually called PIP or Personal Injury Protection.)

At present, there are 22 states that have some form of no-fault law:

No-Fault States:

Arkansas Delaware District of Columbia Florida Hawaii Kansas Kentucky Maryland Massachusetts Michigan Minnesota

New Jersey New York North Dakota Oregon Pennsylvania South Dakota Texas Utah Virginia Washington Wisconsin

When it comes to physical damage to your car or its contents, unlike compensation for bodily injury claims, insurance claims are still based on fault. Those claims are handled in the same way as those in a state with a fault law: by filing a lawsuit against the bad driver or looking to your own collision insurance.

Lawsuits, however, are permitted for injuries meeting a certain threshold, the definition of which varies considerably among the no-fault PIP states. An injured person can sue if the claim exceeds either a monetary or verbal (descriptive) threshold. In monetary threshold states (see below), medical expenses must be over a certain dollar amount. In verbal (descriptive) threshold PIP states (see below), injuries must be relatively “severe” (significant loss of use of body part, disfigurement, permanent disability, bone fracture) or expressed in terms of length of disability (full disability over 180 days). Some states have both, in which case an injured person can file a liability claim if he meets either one.

Because of the different hybrids in the PIP packaging, whether you can file an injury liability claim really will depend on the specifics of your state’s no-fault automobile law. Your best first step is to contact an car accident attorney to discuss how the relevant state law looks at fault and how that law affects your right to recover damages.

States with Add-On Coverage: To complicate matters, some states have “add-on” no-fault automobile insurance laws. “Add on” allows the driver to purchase personal injury protection as an optional coverage. The plan pays benefits to the injured without regard to who caused the accident, but the driver can sue (and be sued) for accident-related injuries and pain and suffering. The following are “add-on” states:

Arkansas Delaware D.C. Maryland

New Hampshire Oregon South Dakota Texas

Virginia Washington Wisconsin

THRESHOLDS: As stated above, no-fault car insurance limits your ability to sue another driver, except under defined thresholds. The threshold–which varies widely from state to state–may be expressed in a verbal description of the seriousness of the injury or a specific dollar value. If you meet the threshold requirements, you may sue to recover damages for pain and suffering.

States with Monetary Thresholds: In the following 7 states, the injured person’s medical expenses must exceed a dollar threshold before taking their injury liability claim to court:

Hawaii
Kansas
Kentucky
Massachusetts
Minnesota
North Dakota
Utah

States with Serious Injury Thresholds: In the following states, you can file a liability claim if you are at least relatively seriously hurt. The criteria of seriousness can be expressed in terms of a written description (e.g. permanent disfigurement, scarring, or fractured bones) or expressed in terms of length of disability (e.g. disability for more than 60 days).

Injuries that qualify as serious are defined by each state’s law. The states that use severity as a threshold are:

Florida
Michigan
New Jersey
New York

Choice States: In these 3 states, the driver chooses to have a policy based on no-fault or the tort-based system where the policyholder retains litigation rights for accident compensation.

Kentucky
New Jersey
Pennsylvania

Resources:

Free Advice Auto Insurance Center: Articles, FAQs, free quotes and research links.

Free Advice Auto Accident Law: Articles, state-specific auto accident and DUI information, and FAQs about auto accidents and the law.