Approximately 12 states require drivers to purchase no-fault insurance policies. While these policies make it easy to get claims paid after an auto accident, they typically limit the type of compensation you can pursue. Case in point, in some states you are barred from claiming non-economic damages such as pain and suffering. Here's more information about this issue.
State Thresholds for Non-Economic Damages
The way no-fault insurance (also called personal insurance protection) works, is drivers submit claims for damages and losses related to auto accidents against their own insurance policies rather than chasing after other parties who may be liable for the incidents. However, in exchange for quick payment of claims, drivers are restricted from suing other drivers for non-economic damages unless they meet a certain threshold.
For instance, In Minnesota, you are only allowed to file a third-party claim against the liable party's insurance if your medical bills exceed $4,000. So, if your medical expenses totaled $3,000, you'll only be eligible to receive payment from your own insurance company for that expense and other economic damages such as lost wages. Pain and suffering, loss of consortium, and similar non-economic damages are typically not covered and you will legally barred from suing the liable driver for the money you're losing out.
Other states base the threshold on the severity of the injury. In Kansas, for instance, you can only file a third-party claim against the driver's insurance if you suffer permanent disfigurement, loss of body function, or sustain a bone fracture in certain parts of the body.
In both of these cases, the insurance company may fiddle with the numbers or dance around the definitions to deny your ability to pursue the compensation owed to you. For instance, the company may claim some of your medical expenses were unnecessary, which may put you under the threshold if the company can successfully discount them. It's a good idea to work with an attorney who can fight on your behalf to prevent this from happening and help you get the money you deserve.
Your Insurance May Dip Into Your Award/Settlement
Even if you do qualify to sue the liable party for additional compensation, it's important to note that many no-fault insurance policies have clauses that state the company can collect any money it paid on your claim from whatever you manage to collect from the liable driver. So, if the insurance company paid you $2,000 and you are eligible to get $5,000 from the other party, you will only ultimately receive $3,000 because you cannot receive duplicate payments for the same damages.
You'll need to read your policy to determine if it contains this clause and then set your expectations for the outcome of your case accordingly.
For more information about this issue or help with an accident claim, contact an auto accident lawyer.