What is the difference between fault and no-fault insurance states?

In fault-based states (the majority of U.S. states), the driver who caused the accident is financially responsible for the damages of those they injured, through their liability insurance. Injured parties can sue the at-fault driver for the full range of damages — medical expenses, lost wages, and pain and suffering — without restriction. In no-fault states, each driver's own auto insurance pays for their medical expenses and lost wages regardless of who caused the crash, through Personal Injury Protection (PIP) coverage. The significant trade-off is that in no-fault states, you can only sue the at-fault driver for pain and suffering damages if your injuries meet a specified threshold — typically a monetary threshold (medical bills exceeding a certain amount) or a severity threshold (serious injury such as significant scarring, bone fracture, or permanent limitation). Florida, New York, Michigan, New Jersey, Pennsylvania, Kentucky, and Kansas are among the most significant no-fault states. Understanding your state's system is critical to knowing your rights after an accident.