Each U.S. state defines its own auto insurance laws, which govern coverage requirements and your right to sue after an accident, among other things. There are two broad legislative approaches: fault and no fault. Most states follow the fault framework, which requires drivers who cause accidents to pay for all damages and injuries.
A state’s designation of fault has several implications, from the type of insurance you need to how claims are handled. Here’s a review of the details you need to know, including which states have no-fault laws and what getting behind the wheel means for you.
More information: How does pet insurance work? A complete guide.
Thirty-eight US states have at-fault auto insurance laws:
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Alabama
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Alaska
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Arizona
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Arkansas
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California
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Colorado
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Connecticut
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Delaware
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Georgia
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Idaho
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Illinois
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Indiana
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Iowa
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Louisiana
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Maine
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Maryland
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Mississippi
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Missouri
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Mountain
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Nebraska
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Snowfall
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New Hampshire
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New Mexico
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North Carolina
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Ohio
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Oklahoma
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Oregon
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Rhode Island
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South Carolina
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South Dakota
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Tennessee
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Texas
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Vermont
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Virginia
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Washington
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W.V.
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Wisconsin
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Wyoming
More information: Minimum auto insurance requirements in all 50 US states
In at-fault states, whoever caused a car accident is financially responsible for the resulting injuries and property damage. If you suffer damage caused by another person, you can file a claim with that person’s insurance. As part of the claims process, insurance companies investigate the details of the accident to determine what happened and identify who is at fault.
You can sue the other driver if there is not enough insurance or if you disagree with the insurance company’s claim decision.
More information: How much does car insurance increase after an accident?
Most at-fault states require minimum levels of property damage liability and bodily injury liability insurance. These coverages ensure that you are financially able to pay someone else’s medical bills and property repair costs, up to your policy limits. However, you are still responsible for costs that exceed your insurance limits.
No-fault states differ from fault states in two ways. First, no-fault states require drivers to have insurance that pays their and their passengers’ medical bills after an accident. Second, no-fault states restrict the ability to sue other drivers for injury-related costs.
Property damage costs are the responsibility of at-fault drivers in all states. That’s why almost all states require drivers to have property damage liability insurance.
More information: What is auto liability insurance and how much do you need?
Contributory and comparative negligence
Because more than one driver can contribute to an accident, states specify how fault can be shared and how that affects who pays damages. There are two main approaches.
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Contributory negligence: Contributory negligence laws prohibit you from recovering funds from another driver if you shared any responsibility for the accident.
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Comparative negligence: Under comparative negligence laws, you can often seek compensation from another driver for damages if you contributed to the accident. The amount available is adjusted based on your level of guilt. For example, if you were 40% responsible for the accident, the other party may only be responsible for 60% of your damages.
In at-fault states, negligence laws apply to property damage and personal injury claims. In no-fault states, negligence laws apply to property damage claims and major personal injury claims that exceed claim thresholds.
At-fault auto insurance laws have advantages and disadvantages.
The advantages of living and driving in a guilty state include:
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If you are a victim, you can seek to recover compensation for your losses, including non-economic issues such as pain and suffering.
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Auto insurance premiums in at-fault states may be lower.
The disadvantages of faulty systems are:
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Claims may take longer to resolve because insurance companies must determine who caused the accident.
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The possibility of lawsuits in at-fault states can increase accident costs.
More information: How to protect yourself from being sued after an accident
When you live in an at-fault state, your bodily injury coverage limit is an important financial protection. This is because medical costs can be the largest expense after an accident. According to data from the Insurance Information Institute, the average cost of personal injury claims in 2023 was more than $26,000. The average property damage claim was much lower: $6,551. In serious accidents, costs for injuries and property damage can be much higher than these averages.
If your bodily injury liability insurance limit is too low, you will pay out of pocket for the excess. With a judgment against you, the other party can place a lien on your home, take funds from your bank accounts, or possibly garnish your wages.
You can minimize the risk of high out-of-pocket costs by setting high liability limits. Financial experts typically recommend liability limits at least as high as your net worth, which is the value of your assets minus the value of your debts.
More information: How much car insurance do I need?
A state is not at fault when it requires drivers to self-insure to cover costs related to injuries resulting from car accidents. Personal Injury Protection (PIP) insurance provides this coverage. No-fault states also restrict your right to sue other drivers for injury-related costs.
In rear-end collisions, the rear driver is generally assumed to be at fault for following too closely. However, there may be exceptions. An attorney can help you determine if the front driver’s actions contributed to the accident.
More information: What to do after a car accident: Your step-by-step guide
Two drivers can share fault in a car accident. State laws specify how shared fault affects financial responsibility for resulting damages.
Tim Manni Edited this article.