When an individual is involved in an auto accident, one of the immediate concerns is obtaining payment for financial losses resulting from personal injury and property damage. State laws differ as to how an injured party can go about obtaining compensation after a motor vehicle accident. The major differences, according to the Insurance Information Institute, have to do with to restrictions on the right to sue an at-fault party and whether or not the policyholder’s insurance company will pay the maximum amount of first-party benefits regardless of who is at fault.
Massachusetts uses an approach known as no-fault, which is used by a number of other states. No-fault can mean different things depending on state law, but in Massachusetts the approach could be considered pure no-fault, because it involves compulsory purchase of personal injury protection and involves both restrictions on tort litigation and payment of first-party benefits.
Personal injury protection coverage varies by policy, but typically covers medical expenses, lost wages and funeral expenses, which are things that would otherwise be sought in tort litigation. Not every state which offers personal injury protection requires motorists to carry it, though Massachusetts does.
Personal injury protection is not an absolute bar to personal injury litigation, but no-fault laws specify that certain conditions must be met before such litigation is a possibility. In Massachusetts, a monetary threshold is used, which involves the specific cost of medical bills.
Although fault isn’t a factor in whether or not a crash victim in Massachusetts is covered by auto insurance, it is used by insurance companies in the payment of damages and usually affects the at-fault driver’s cost of insurance in the future.
In an upcoming post, we’ll look a bit more at the impact of fault as it relates to insurance in car accident cases in Massachusetts.
Sources: dmv.org, “PIP Insurance,” Accessed Nov. 19, 2014.
The Commonwealth of Massachusetts, “General Laws; Part I; Title XIV; Chapter 90; Section 34M,” Accessed Nov. 19, 2014.
Insurance Information Institute, “No-Fault Auto Insurance,” February 2014.