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What Does “No Fault” Mean for My Car Insurance Payout?


In 2017, there were 6,452,000 police-reported crashes, according to the National Highway Traffic Safety Administration. That’s more than 17,000 crashes every day. These crashes are the result of various things – like speeding, drunk driving and distracted driving – and many are avoidable. In other words, many of these crashes are somebody’s fault. However, some states have what’s known as a no-fault system of auto insurance. Here’s how it works.   

No Fault vs Tort

Each state sets its own rules for auto insurance, but the basic systems used can be divided into two broad categories: tort and no fault.

  • In tort states, the driver who causes the accident is responsible for paying for both the property damage and bodily injury claims. Additionally, the driver who is not at fault can sue the driver who is at fault.
  • In no-fault states, each driver is responsible for paying for their own bodily injury claims, regardless of who causes the crash, and they will file a claim with their own insurer. Additionally, the driver who is not at fault may not be allowed to sue the driver who is at fault. However, no-fault states typically allow lawsuits if injuries are severe enough.

Within these two broad categories, there are many variations. Often, both drivers contribute to a crash to varying degrees, and tort states have developed different ways of handling this. No-fault systems can also vary, and some states may use a combination of the two systems. States that use a no-fault system for injuries typically do not apply this system to property damage.

Hawaii’s Auto Insurance System

Most states use a tort system of auto insurance. Hawaii is one of the exceptions.

Hawaii uses a no-fault system for bodily injuries. If you are in a crash, your insurance will cover any injuries suffered by you and your passengers, up to the policy limit. You cannot sue the other driver unless your injuries are very severe. This also means that you cannot be sued for injuries unless they are severe.

However, for property damage, the no-fault rules do not apply in Hawaii. This means that the at-fault driver is responsible for damage to vehicles and other property.

Drivers in Hawaii are required to maintain auto insurance with the following coverage types and minimum limits:

  • $10,000 per person for personal injury protection (PIP)
  • $20,000 per person for bodily injury liability
  • $40,000 per accident for bodily injury liability
  • $10,000 for property damage liability

Drivers may also wish to purchase higher limits and additional coverage types, including uninsured and underinsured motorist coverage.  

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