If you're driving in Hawaii, you're operating under a no-fault insurance system—and if you're new to the islands or unfamiliar with how this works, it can feel confusing. Here's what matters most: when you get into a car accident in Hawaii, your own insurance pays your medical bills first, regardless of who caused the crash. This system is designed to get you medical care quickly without waiting for fault to be determined or fighting with the other driver's insurance company.
But Hawaii's no-fault system has some unique quirks, especially compared to the mainland. Understanding Personal Injury Protection (PIP) coverage, what it does and doesn't cover, and when you can step outside the no-fault system to sue can save you thousands of dollars and major headaches down the road.
What Is No-Fault Insurance?
In a traditional fault-based insurance state, if someone rear-ends you, their insurance pays for your medical bills and car repairs. You file a claim against their policy, and there's often a lot of back-and-forth about who was at fault and how much they owe you.
Hawaii's no-fault system works differently. When you're injured in a car accident, your own insurance company pays your medical expenses through your Personal Injury Protection coverage, up to your policy limits. This happens regardless of whether you caused the accident, the other driver caused it, or it was genuinely a mutual mistake. The goal is to streamline the process—you get medical care immediately, and insurance companies sort out fault separately for property damage claims.
Your PIP coverage also extends beyond just you as the driver. It covers your passengers, family members living in your household who use your vehicle, and even you or your family members injured as pedestrians in a car accident. That's broader protection than many people realize.
Hawaii's Minimum PIP Requirements
Hawaii law requires every driver to carry at least $10,000 per person in Personal Injury Protection benefits. This is the absolute minimum, and honestly, it's not a lot when you consider the cost of emergency room visits, hospital stays, and rehabilitation services in Hawaii.
Here's what that basic $10,000 PIP coverage includes: medical bills, rehabilitation costs, hospital expenses, X-rays, surgery, ambulance rides, and professional nursing care. If you're injured in an accident, your PIP kicks in to cover these expenses up to your policy limit.
But here's the catch: basic PIP doesn't cover lost wages if you can't work due to your injuries. It doesn't cover the cost of hiring someone to help with household tasks or lawn care while you recover. And it doesn't include death benefits or funeral expenses. Those are all optional add-ons you need to purchase separately.
In addition to PIP, Hawaii requires drivers to carry bodily injury liability coverage of $20,000 per person and $40,000 per accident, plus $10,000 in property damage liability. This liability coverage protects you if you cause an accident and someone else is injured or their property is damaged.
Optional PIP Coverage Worth Considering
Given the limitations of basic PIP, most insurance agents in Hawaii will recommend adding optional coverages. The most common add-ons include wage replacement benefits, death benefits, and funeral expense coverage.
Death benefit coverage starts at $25,000 and can go up to $100,000. This ensures that if you're killed in a car accident, your surviving spouse, dependents, or estate receives financial support. Funeral expense benefits typically start at $2,000, which helps cover burial or cremation costs.
You can also increase your PIP limits beyond the $10,000 minimum. Many drivers opt for $25,000 or $50,000 in PIP coverage, especially if they have high-deductible health insurance or no health insurance at all. Your PIP coverage is actually primary—it pays before your health insurance kicks in for car accident injuries.
When You Can Step Outside the No-Fault System
Here's where Hawaii's system gets interesting. While your PIP covers initial medical costs, you're not completely barred from suing the at-fault driver. Hawaii allows you to step outside the no-fault system if your injuries are serious enough.
You can file a lawsuit against the other driver if any one of these conditions is met: your medical expenses exceed $5,000, you suffer permanent loss of a bodily function or body part, you experience permanent disfigurement that causes mental or emotional hardship, or the accident results in death.
That $5,000 threshold is important. It means that for relatively minor accidents—say, a fender bender that results in whiplash and a few physical therapy visits—you're staying within the no-fault system. But if you break a bone requiring surgery, or sustain injuries that need ongoing treatment, you'll likely cross that threshold and can pursue additional compensation from the at-fault driver's insurance.
This also works in your favor as a driver: you can't be sued unless the injured person's medical expenses exceed $5,000 or they meet one of the serious injury thresholds. This protects you from frivolous lawsuits over minor accidents.
What It Costs to Insure a Car in Hawaii
Here's some good news: Hawaii has some of the most affordable car insurance rates in the country. Full coverage car insurance in Hawaii averages between $1,400 and $1,700 per year, depending on which study you look at. Minimum coverage—which includes just your required PIP and liability limits—runs about $400 to $450 annually.
Rates have been rising, though. From 2023 to 2024, Hawaii saw a 27% increase in average premiums, followed by another 6% increase from 2024 to 2025. That's still significantly lower than the national average, but it's a trend worth watching.
One unique advantage in Hawaii: insurance companies can't use your age or gender to determine your rates. This makes Hawaii one of the most equitable states for car insurance pricing. Your rates are based on factors like your driving record, the type of car you drive, where you live, and your coverage selections—but not your age or whether you're male or female.
Practical Tips for Hawaii Drivers
Consider increasing your PIP limits beyond the $10,000 minimum, especially if you don't have robust health insurance. Medical care in Hawaii can be expensive, and emergency room visits alone can quickly eat through $10,000.
Add optional wage replacement coverage if you're self-employed or don't have sick leave through your employer. A serious accident could leave you unable to work for weeks or months, and basic PIP won't replace that lost income.
Keep your insurance card in your vehicle at all times. Hawaii law requires you to have proof of insurance with you whenever you're driving, and you can be cited if you can't produce it during a traffic stop or after an accident.
Shop around for quotes from multiple insurers. Companies like GEICO, USAA, and local providers like Island Insurance often have competitive rates in Hawaii. Because the state prohibits age and gender-based pricing, you might find more consistent pricing across different companies than you would on the mainland.
Getting Started with the Right Coverage
Hawaii's no-fault insurance system is designed to get you medical care quickly after an accident without the hassle of determining fault first. But the system only works if you have the right coverage in place before you need it.
Take the time to review your current policy. Do you have just the bare minimum $10,000 in PIP, or have you increased your limits? Have you added optional coverage for lost wages and death benefits? These decisions matter most when you're sitting in an emergency room or dealing with the aftermath of a serious accident.
If you're shopping for new coverage or reviewing your existing policy, get quotes from multiple insurers and ask specifically about PIP limits and optional coverages. A few extra dollars per month for increased PIP coverage can make a huge difference if you're ever in a serious accident. And with Hawaii's affordable rates compared to the rest of the country, upgrading your coverage is often more budget-friendly than you might expect.
