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Some states have “no-fault” auto insurance – also called “personal injury protection” or “PIP” – where the insurance company (“insurer”) automatically pays, regardless of fault, certain losses or damages sustained by an accident victim who was covered by the insurer’s policy or was injured by someone covered by the insurer’s policy (the “insured”). These damages are called “economic damages,” and include things like medical expenses and funeral costs.
But what about “non-economic” losses or damages, like pain and suffering and loss of consortium, which is the loss of a spouse’s companionship?
When Can You Sue?
A lot of the states’ no-fault laws have no restrictions on when you can file a “tort action,” that is, a private civil lawsuit against the wrongdoer or “tortfeasor,” for non-economic damages.
However, there are some states that place limits or “thresholds” on when the tortfeasor can be sued. These thresholds are typically based on:
- The amount of medical expenses that the injured person has paid or has been billed for payment, known as the “monetary threshold,” or
- The type of injury that the victim suffered, known as the “injury threshold”
The main idea of using thresholds is to prevent lawsuits over every single injury, and to limit the suits to “serious injuries.” However, state no-fault laws differ on what exactly is “serious.”
In addition, not all states use the term “non-economic loss,” but could use terms like “pain and suffering,” “mental anguish,” “other nonpecuniary loss” or “non-monetary detriment.”
So, if you’ve been injured in a car accident, it is vital that you understand your state’s no-fault laws and how they treat non-economic damages.
Many states that limit tort actions for non-economic loss include a monetary medical expense threshold in their definition of “serious injury.” The monetary thresholds vary, but are usually at least $1,000.
Most no-fault statutes allow the monetary threshold to be met only from expenses “accrued,” “rendered” or expenses “incurred.” In other words, the expenses have to have been paid by or billed to the victim when the suit is filed, or there must be proof that the threshold will be met by the time the lawsuit goes to trial. The victim can’t use future, uncertain expenses to meet the threshold.
No-fault laws require that the injured person’s medical expenses be “reasonable and necessary.” In some states, a medical bill will be enough to show that an expense was reasonable and necessary. In most states, however, the injured person has to have a doctor testify that the treatment and the accident were connected, that is, the accident made the treatment necessary.
Some states have mathematical formulas that are used to determine if an expense is “reasonable,” while many states specifically define the types of medical expenses that can be used to determine whether the threshold has been met. These include things like:
- Surgery and
You need to check the law in your area to see if your medical expenses can be used to meet the threshold.
Where lawsuits are allowed under no-fault laws, the victim of a “serious” injury still has the right to sue the tortfeasor even if the victim recovers PIP benefits. However, state no-fault laws are not consistent on the meaning of “serious” injury.
Death is a “serious” injury under all no-fault laws allowing for lawsuits against the other driver, and so if an insured dies due to a car accident, his or her survivors can file a lawsuit against the tortfeasor even though PIP benefits, like funeral expenses, were paid.
Most no-fault laws include a list of serious injuries, and state laws vary in the terms used to describe injuries. In general, however, “serious” injuries usually include things like:
- Permanent “disability,” “injury” or “loss of a body function”
- Dismemberment, or the “loss of a body member,” like an arm or an organ
- Fractures, or bone breakages
- Permanent or “significant” disfigurement
In addition to the different terms used by the various no-fault laws, the states differ on the types or “quality” of the injury or what must be proven to establish that the injury is in fact “serious,” even if it’s listed in the law. For example:
In states where there is a monetary threshold and and the no-fault law lists “serious injuries,” the victim usually only has to meet one of them in order to be able to sue the other driver.