Going Outside No-Fault Insurance After a Car Accident
States that use no-fault car insurance have certain thresholds that allow a victim to go outside the no-fault system to bring a claim against the at-fault driver or their insurer. There are generally two main types of thresholds. One type is based on the amount of medical expenses incurred by the victim, while the other type is based on the scope of the injuries that they sustained. Some states use a combination of both thresholds.
Monetary Thresholds for Medical Expenses
A no-fault insurer may have the right of reimbursement or subrogation if their insured pursues a claim outside the no-fault system.
As of 2018, Kansas, Hawaii, and the District of Columbia allow car accident victims to go outside the no-fault system when the cost of their medical expenses exceeds their policy’s PIP benefit amount. Massachusetts, Kentucky, Minnesota, North Dakota, and Utah have specific dollar thresholds that must be met, which range between $1,000 and $4,000 depending on the state. If you go outside the no-fault system to file a liability insurance claim, your no-fault insurer may have a right of reimbursement or subrogation against the compensation that you receive from the liability insurer. This means that victims cannot recover twice for the same type of loss.
Only necessary medical expenses will qualify toward the threshold in these states. As a result, an insurer may argue that a certain type of procedure or treatment either was not necessary or was not relevant to the injuries arising from the accident. However, a procedure or treatment is not unnecessary just because you could choose to forego it. As long as it serves a reasonable diagnostic or therapeutic purpose, it should qualify as a necessary medical expense.
Serious Injury Thresholds
As of 2018, New York, New Jersey, Pennsylvania, Massachusetts, Florida, Kentucky, Michigan, Kansas, Minnesota, North Dakota, Utah, Hawaii, and the District of Columbia allow car accident victims to go outside the no-fault system when they have suffered certain types of serious injuries. This exception to the no-fault rule allows victims to receive compensation for non-economic damages like pain and suffering. Each state defines serious injuries slightly differently and very specifically (except Pennsylvania, which simply uses the phrase “serious injury”). Some common categories of serious injuries include permanent injuries, fractures, disfigurement, disabilities, or the loss or limitation of a body part or function.
What Is a Serious Injury?
The definition of a “serious injury” may vary by state, but it commonly includes:
Scarring or disfigurement
Loss or limitation of a body part or function
In some states, an injury that is permanent may not need to be severe to meet the serious injury threshold, and it may not even need to have a significant impact on your work or daily life. A disability similarly may not need to involve a total loss of function to qualify. Meanwhile, a fracture does not necessarily require that the bone is completely broken. A chipped or cracked bone may be enough to qualify.
However, other states require a permanent injury, disability, or fracture to be significant. What this means can be very fact-specific, and the vagueness of the law often gives rise to disputes with insurers over the value of a claim. Even if you are not sure whether you meet the requirements for going outside the no-fault system, you can file a claim against the at-fault driver’s insurer and address the threshold in your negotiations. You may be able to convince the insurer to offer a settlement without a legal finding that your injuries qualify.