diff --git a/nexus/db-model/src/instance.rs b/nexus/db-model/src/instance.rs
index 52cee475f2a..966be5e75f8 100644
--- a/nexus/db-model/src/instance.rs
+++ b/nexus/db-model/src/instance.rs
@@ -110,7 +110,10 @@ impl Instance {
             ncpus: params.ncpus.into(),
             memory: params.memory.into(),
             hostname: params.hostname.to_string(),
-            auto_restart_policy: params.auto_restart_policy.clone().into(),
+            auto_restart_policy: params
+                .auto_restart_policy
+                .clone()
+                .map(Into::into),
             runtime_state,
 
             updater_gen: Generation::new(),
@@ -124,7 +127,11 @@ impl Instance {
 
     /// Returns `true` if this instance can be automatically restarted.
     pub fn can_reincarnate(&self) -> bool {
-        self.runtime_state.can_reincarnate(self.auto_restart_policy)
+        self.auto_restart_policy
+            .map(|policy| self.runtime_state.can_reincarnate(policy))
+            // If the instance does not have a specified auto-restart policy,
+            // assume it cannot be restarted.
+            .unwrap_or(false)
     }
 }
 
diff --git a/nexus/types/src/external_api/params.rs b/nexus/types/src/external_api/params.rs
index 6c8c029a355..d57c2a60b41 100644
--- a/nexus/types/src/external_api/params.rs
+++ b/nexus/types/src/external_api/params.rs
@@ -1061,11 +1061,8 @@ pub struct InstanceCreate {
 
     /// A policy that indicates whether the control plane should automatically
     /// restart this instance if it fails.
-    ///
-    /// If this is not provided, it defaults to the "sled_failures_only"
-    /// auto-restart policy.
     #[serde(default)]
-    pub auto_restart_policy: InstanceAutoRestart,
+    pub auto_restart_policy: Option<InstanceAutoRestart>,
 }
 
 #[inline]
diff --git a/openapi/nexus.json b/openapi/nexus.json
index 84aab15134e..1574f85efad 100644
--- a/openapi/nexus.json
+++ b/openapi/nexus.json
@@ -15227,10 +15227,9 @@
         "type": "object",
         "properties": {
           "auto_restart_policy": {
-            "description": "A policy that indicates whether the control plane should automatically restart this instance if it fails.\n\nIf this is not provided, it defaults to the \"sled_failures_only\" auto-restart policy.",
-            "default": {
-              "type": "sled_failures_only"
-            },
+            "nullable": true,
+            "description": "A policy that indicates whether the control plane should automatically restart this instance if it fails.",
+            "default": null,
             "allOf": [
               {
                 "$ref": "#/components/schemas/InstanceAutoRestart"