Reader question:

Which U.S. states have no fault car insurance laws?

Abigail

That’s a really good question, Abigail.

No fault car insurance laws have done a lot to lower car insurance rates in several parts of the country, although they have also had the more negative effect of bringing up the rate of car insurance fraud, especially in states like New York. They are notable in that they keep the injuries in the family, in a way, by required personal injury protection. In a no fault car insurance state, you are covered by your own car insurance company instead of the other driver’s car insurance company, even if the other driver is the one who actually caused the accident.

Of the fifty states in the U.S., twelve of them have no fault car insurance laws, as does Puerto Rico. New Hampshire has no insurance laws, and the remaining thirty seven have differing limits and laws. In these no fault states, one of the things that keeps the price down is the limit on being able to sue the at fault driver. These are controlled by either dollar limits, for when the damage goes over a certain amount, or a verbal limit, for when the damage is that of a predetermined nature. States who go by a verbal limit include New York, Pensylvania, Florida, New Jersey, and Michigan. Then there are Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota and Utah; these states operate on the dollar limit. Of these states, three of them (New Jersey, Pennsylvania, and Kentucky) give policy holders the option to reject the right to sue entirely for even lower rates. Colorado used to be among the no fault states, but has since changed back to regular at fault laws.

Cheers,

Fashun Guadarrama.