Monday, January 28, 2008

Car Accidents in a No-Fault State

1.Car Accidents in a No-Fault State

If you have been injured in an automobile accident, in about a quarter of states, it does not matter who was at fault in order for you to recover money under an insurance policy. Regardless of who was at fault, in a no-fault state, your own insurance policy will protect you and provide you with immediate medical treatment. That’s the good news. The not-so-good news is that in no-fault states you are limited in your ability to sue the negligent driver for damages.

There are currently nine states that are considered “No-Fault” and three additional states which are “Choice” states, where you are given a choice of purchasing a no-fault policy or a “tort policy”. The tort policy is the same type of fault policy as in the majority of states. If you have a tort policy in a choice state, the claims procedures are the same as if you are in a fault state and you retain your right to sue the neligent party with few limitations. In general, tort policies have higher premiums.

The No-Fault states are: Hawaii, Florida, Kansas, Massachusetts, Michigan, Minnesota, North Dakota, New York and Utah. The Choice states are Kentucky, New Jersey, Pennsylvania, plus the District of Columbia.
Under a pure no-fault system, your own auto insurance policy would pay for any economic damages including medical bills and lost wages up to your policy limits. You would be prohibited from suing a negligent driver for general damages such as pain and suffering, loss of companionship, etc. Currently, there are no pure no-fault states. All of the no-fault states have somewhat of a modified system where your insurer pays for your economic damages up to the policy limits, but you may be allowed to sue for non-economic or general damages (i.e., pain and suffering, loss of services, etc.) if those damages exceed a certain level. In some states that level is $250,000; in others it is higher, and in still others, you or your family may sue only if the injuries are “serious” or resulted in death, regardless of the dollar amount.

The section of your policy that covers you for bodily injuries (and your bodily injury claims) in a no-fault state is called Personal Injury Protection, or PIP. Although different states cover different things, in general, PIP covers your medical bills, lost wages, funeral costs and death benefits up to your policy limits. Most of the states have a minimum of $10,000 coverage for PIP which can be increased for a higher premium. In some states you can decrease your premium by applying a deductible.

No-fault insurance coverage can be very complex and you may want to consult a personal injury lawyer to help you through the process. Here is an example of how complicated it is in Massachusetts. There, every driver must carry personal injury protection (PIP) coverage with a minimum of $8,000 per person which covers the following benefits:

• Medical expenses (including eye glasses, prosthetic devices, funeral services and professional nursing);
• Seventy five (75%) percent of lost wages or lost earning power if unemployed; and,
• Payment to people for necessary services they rendered to the household, which the injured party would have performed without pay (i.e. cleaning, etc.).
Your Massachusetts PIP coverage will only pay the first $2,000 of your medical bills, but will cover up to total of $8,000, if you have no other health insurance. The expenses or losses must be incurred within two (2) years from the date of the accident.
In Massachusetts, you may sue the negligent driver for general damages only under these circumstances:
• Your reasonable and necessary medical bills exceed $2,000, or
• There is permanent or serious disfigurement, or
• A fracture, or
• Partial or complete loss of a body part, or
• Loss of sight or hearing, or
• Death

All of the other No-Fault and Choice states are variations on this theme, but with some major differences in limits and rules for filing suit. Check with your insurance agent, your insurance company, your state’s Department of Insurance, or a car accident lawyer if you have any questions about your state’s rules, individual coverages or your right to sue.