Tort Vs No Fault Car Insurance

Every state runs its car accident claims through one of two basic legal systems: tort, or no-fault. Which one your state uses affects who pays first after an accident, and whether you can sue for pain and suffering.

The tort system

Under a tort system, the driver found at fault in an accident (through their insurer) is responsible for the other party's medical bills, property damage, lost wages, and pain and suffering. Most states use this system. A handful of states — Kentucky, New Jersey and Pennsylvania — let drivers choose between full-tort and limited-tort coverage: limited tort gives up the right to sue for pain and suffering in exchange for a lower premium, while full tort keeps that right at a higher cost. Check your state's current default and options directly with your insurer, since these choice rules can change.

The no-fault system

A no-fault system requires your own insurer to pay your medical bills after an accident regardless of who caused it, so injured drivers get treatment without waiting on a fault determination or a lawsuit. In practice, U.S. no-fault systems are really a hybrid with limited-tort rules layered on top — you still may be able to sue the at-fault driver for serious injuries, just not for the smaller claims your no-fault coverage already handles. The core no-fault benefit is usually personal injury protection (PIP), which covers medical costs for you and your passengers no matter who was at fault. A few states layer additional no-fault benefits on top — for example, New York offers an optional extra benefit (Optional Basic Economic Loss, or OBEL) covering further lost income and related costs beyond the standard PIP amount.

Which states are no-fault

Twelve states have no-fault auto insurance laws, and every driver in them must carry personal injury protection. They differ in when you can step outside no-fault and sue the other driver (Insurance Information Institute, “Background on: No-fault auto insurance”):

• Verbal threshold — you can sue only for injuries that meet a legal description of serious harm, such as permanent injury or significant disfigurement: Florida, Michigan, New Jersey, New York and Pennsylvania.
• Monetary threshold — you can sue once your medical costs pass a set dollar amount: Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota and Utah.

The other states and D.C. use the tort system, where the at-fault driver's liability insurance pays the other side's losses.

Full tort vs. limited tort: how the choice works

New Jersey, Pennsylvania and Kentucky have “choice” no-fault laws: when you buy a policy, you decide whether to accept the lawsuit threshold or reject it and keep the right to sue for any auto-related injury (Insurance Information Institute). The two options go by different names in each state — Pennsylvania calls them limited tort and full tort; New Jersey calls them “limitation on lawsuit” and “no limitation on lawsuit.”

• Limited tort costs less. You can still recover medical bills and other out-of-pocket losses through your own PIP, and you can still sue for pain and suffering if your injury meets the state's serious-injury threshold, but not for less serious injuries.
• Full tort costs more and keeps your right to sue for pain and suffering after any injury, however minor.

The choice applies to you and usually to relatives in your household, including when you're a passenger or pedestrian, so it's worth making deliberately rather than accepting whichever option the form defaults to. Ask your insurer for the price difference: it varies by state and insurer, and for some households full tort costs less extra than people expect.

Comparative negligence: when both drivers share the blame

Many accidents aren't 100% one driver's fault, which is where comparative negligence comes in. It lets each side recover a share of their losses reduced by their own percentage of fault, rather than an all-or-nothing outcome. There are two common versions:

• Pure comparative negligence: you can recover damages reduced by your share of fault, no matter how large that share is. If you're found 25% at fault on a $10,000 claim, you'd recover $7,500.
• Modified comparative negligence: works the same way, but only up to a fault threshold (commonly 50% or 51%, depending on the state). If you're found to be more at fault than that threshold allows, you can't recover anything.

Which version applies, and exactly where the threshold sits, is set state by state, so it's worth checking your own state's rule (or asking your insurer or an attorney) if you're ever in a shared-fault accident.

AutoInsuranceQuery editorial team. Last reviewed: September 29, 2026.