Accident Insurance

To make matters worse, despite the fact that automobile liability insurance is mandatory in America, approximately 16% of all American drivers are uninsured.  This ranges from approximately 28% of drivers in Mississippi to about 4.5% of drivers in  Massachusetts.  One popular spot for Canadians is Florida, where approximately 24% of all drivers have no insurance!
 

For those American drivers with insurance, there are, in general, four categories of car insurance: No-fault, choice no-fault, tort liability and add-on. There are differences between these different types. The major differences include whether there are restrictions on the right to sue and whether the policyholder’s insurer pays first-party benefits, regardless of which driver was at fault for the motor vehicle accident.

In 12 states (as well as The District of Columbia and Puerto Rico), there is a no-fault car insurance scheme.

1. Florida,
2. Michigan,
3. New Jersey,
4. New York,
5. Pennsylvania,
6. Hawaii,
7. Kansas,
8. Kentucky,
9. Massachusetts,
10. Minnesota,
11. North Dakota,
12. Utah.

The Insurance Information Institute states the following about no-fault insurance:  The no-fault system is intended to lower the cost of auto insurance by taking small claims out of the courts. Each insurance company compensates its own policyholders (the first party) for the cost of minor injuries, regardless of who was at fault in the accident. (The second party is the insurance company and the third is the other party or parties hurt as a result of the accident.) This type of insurance is often misunderstood because the term itself implies a single insurance type.  In reality, it’s not quite that simple.  “Pure” no-fault insurance describes car insurance that provides for no-fault payment of first party benefits and restricts the right to sue (what’s referred to as the “limited tort” option).  The first party (policyholder) benefit coverage is known as personal injury protection (PIP).   Based on this definition, there are currently no states that have a pure no-fault system because all of them provide the ability to sue for non-economic or general damages (but only if and when those damages exceed a certain threshold).  Some variations of no-fault insurance relate to the threshold required to trigger the ability to sue, said threshold measured either in “monetary” terms (this applies to Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota and Utah) or “verbal” terms.  This applies in Florida, Michigan, New Jersey, New York and Pennsylvania.  This means you can file a liability claim if you are at least relatively seriously hurt. The criteria of seriousness can be expressed in terms of a written description (e.g. permanent disfigurement, scarring, or fractured bones) or expressed in terms of length of disability (e.g. disability for more than 60 days).  Injuries that qualify as serious are defined by each state’s law.
  

Kentucky, New Jersey and Pennsylvania are “Choice” states, meaning drivers can choose a no-fault system policy or a policy based on traditional tort liability law.  The tort policy used in “Choice” states are the same as those used in states without no-fault laws and, therefore, the claims procedures are the same.   A driver retains the right to sue, generally without any significant statutory limitations. Kentucky’s no-fault scheme uses a monetary threshold.  New Jersey and Pennsylvania, the no-fault insurance system uses a verbal threshold.


To complicate matters, Arkansas, Delaware, D.C. and Maryland have “add-on” no-fault automobile insurance laws. Add on allows the driver to purchase personal injury protection as an optional coverage. The plan pays benefits to the injured without regard to who caused the accident, but the driver can sue (and be sued) for accident-related injuries and pain and suffering.


If all of this this seems complicated, it is.  It is another reason why, if you are involved in a serious cross border accident, you need an experienced personal injury attorney.  Whether you are a Canadian injured by an American driver or an American injured by a Canadian driver, your ability to be compensated will depend in part on the ability of your attorney to navigate the complexities of the various insurance schemes.