What is 'no-fault' auto insurance?

No-fault auto insurance systems vary by state but generally require drivers to first claim their own injuries against their own insurance, regardless of who caused the accident, through Personal Injury Protection (PIP) coverage. PIP covers medical expenses, lost wages, and other economic losses up to specified limits. Lawsuits against the at-fault driver are restricted — typically limited to cases meeting a 'serious injury threshold' (defined by monetary amount, type of injury, or both). No-fault states currently include Florida, Michigan, New Jersey, New York, Pennsylvania, and several others. The goal of no-fault is to reduce litigation, speed claim payment, and contain insurance costs — though results have been mixed. Tort-liability states (the majority) allow the at-fault driver's insurance to be sued for all damages without the no-fault restrictions. Choice no-fault states let drivers choose between no-fault and traditional tort coverage.