Choice no-fault: New Jersey, Pennsylvania and Kentucky

In a choice no-fault state, every driver has injury coverage that pays regardless of fault. You then choose whether to keep your full right to sue an at-fault driver for pain and suffering or give part of it up for a lower premium. Three states work this way: New Jersey, Pennsylvania and Kentucky. The default if you make no choice differs. New Jersey defaults to the limited right to sue, Pennsylvania to full tort, and Kentucky to the no-fault limits unless you file a rejection.

The three systems side by side

Sources: the state guides on this site, drawn from the New Jersey Department of Banking and Insurance, the Pennsylvania Insurance Department and 75 Pa.C.S. § 1705, and Kentucky's KRS 304.39.

New Jersey: Limitation on Lawsuit

On a New Jersey standard policy you pick one of two options:

• Limitation on Lawsuit, a verbal threshold. You can sue for pain and suffering only for loss of a body part, significant disfigurement or scarring, a displaced fracture, loss of a fetus, a permanent injury, or death. It costs less, and it is what you get if you don't choose.
• No Limitation on Lawsuit. You can sue for pain and suffering for any injury caused by someone else, at a higher premium.

Either way you can still sue for economic losses beyond what PIP pays. New Jersey also sells a stripped-down basic policy with $15,000 PIP and $5,000 of property damage liability. Bodily injury liability of $10,000 is optional, and the policy carries no uninsured motorist coverage. It automatically includes the limited right to sue. See the New Jersey guide for the 2026 standard-policy minimums.

Pennsylvania: limited tort vs full tort

Pennsylvania's choice appears on your declarations page as the tort option.

• Full tort keeps your unrestricted right to sue. If you never sign a limited tort election, the law treats you as having full tort.
• Limited tort keeps your right to recover medical bills, lost wages and other out-of-pocket losses. You give up suing for pain and suffering unless the injury is "serious": death, serious impairment of a body function, or permanent serious disfigurement.

Limited tort has important exceptions. You keep full tort rights if the at-fault driver was convicted of DUI for that crash (or accepted Accelerated Rehabilitative Disposition), was driving a car registered in another state, intended to injure someone, or was uninsured. You also keep them if you were hurt in a vehicle that is not a private passenger vehicle, such as a bus. Insurers cannot cancel or refuse to insure you because of the option you choose. See Pennsylvania.

Kentucky: opting out by rejection

In Kentucky you are deemed to accept the no-fault rules by driving on its roads. PIP pays up to $10,000 of medical bills, lost income and related costs regardless of fault. You can sue for pain and suffering only if your medical expenses exceed $1,000, or the injury involves a broken bone, permanent disfigurement or injury, loss of a body member, permanent loss of bodily function, or death.

To keep an unlimited right to sue, you must file a written rejection with the Kentucky Department of Insurance on its form before an accident. The trade-off is significant. If you reject, other drivers can sue you without limits too, and you generally cannot collect basic PIP benefits. Kentucky also ties the injury lawsuit deadline to PIP: two years from the injury or the last PIP payment, whichever is later. See Kentucky.

How much you save, and what you give up

The saving from the limited option is on the injury portions of your premium. It varies by insurer, territory and the coverages you carry, so ask for both prices on the same quote. The cost of the limited option shows up only if you are hurt by someone else. Then the question is whether your injury will cross the threshold.

A worked example

Say you live in Pennsylvania and another driver runs a red light and hits you. You have a herniated disc that causes months of pain but improves with therapy. Your medical benefits pay $5,000, your health insurance covers the rest, and you miss four weeks of work.

• With full tort, you can claim lost wages, unpaid medical costs and pain and suffering from the other driver's liability insurer.
• With limited tort, you can still claim the lost wages and unpaid medical costs. Whether you can claim pain and suffering depends on whether the injury is found to be a "serious impairment of a body function," which is often disputed and may have to be decided in court.

If the other driver was uninsured or drunk, you would have full tort rights anyway under the exceptions.

How to decide

Consider the limited option if:

• the premium difference matters to your budget and you have good health and disability insurance;
• you drive little, or mostly at low speeds;
• you understand you are giving up compensation for pain from non-permanent injuries.

Consider keeping the full right to sue if:

• you or household members commute long distances or carry children;
• you have limited health insurance or no sick leave;
• the price difference is small for your household.

Remember the choice usually covers relatives in your household, not just you. Review it at every renewal; how to read your car insurance declarations page shows where it appears.

Key takeaways

• New Jersey, Pennsylvania and Kentucky let drivers trade some of the right to sue for pain and suffering for a lower premium.
• Defaults differ: New Jersey defaults to Limitation on Lawsuit, Pennsylvania to full tort, and Kentucky to the no-fault rules unless you file a rejection.
• Limited options still let you recover economic losses. Only non-economic damages for non-serious injuries are restricted.
• Pennsylvania's limited tort has exceptions, including an uninsured, out-of-state-registered or DUI-convicted at-fault driver.
• The election usually binds your household, so revisit it at renewal and compare both prices.