As of 2015, states that legally require no-fault car insurance include Florida, Hawaii, Kansas, Kentucky and Massachusetts, according to Allstate. Additional states with no-fault insurance are Michigan, Minnesota, New Jersey, New York and North Dakota. Pennsylvania and Utah laws also dictate this kind of insurance coverage.
In addition to the states that require no-fault insurance, three states allow their citizens to choose between no-fault and "full tort" coverage, notes Allstate. These are Kentucky, New Jersey and Pennsylvania.
A no-fault car insurance policy requires that in case of a car accident, each insurance provider is responsible for the coverage of their own customer's damages regardless of who is at fault, explains the RAND Corporation. Starting in the 1970s, some states initially enacted no-fault coverage as a way to alleviate perceived problems with car insurance, such as high court costs, compensation delays and fraudulent claims. Insurance providers and consumer groups were both originally counted as advocates of adopting no-fault insurance laws, with the strongest argument being that no-fault insurance would ultimately lower premium costs.
Previous claims of lower premiums, however, have not proven true overall, claims the RAND Corporation. By 2004, insurance premiums widened to become 50 percent higher than premiums in states without no-fault coverage. In three of the states that repealed no-fault coverage, liability premiums fell by 10 to 30 percent. These states were Georgia, Connecticut and Colorado,