North Dakota is one of over a dozen states that has adopted a “No-fault” auto insurance system. There are common misconceptions on what being a “No-fault” state means and how it works in the event of an auto accident as requirements can differ for each state. Let’s dig a little deeper into what this means specifically for North Dakota and its residents with a personal auto policy.
You’re in your car and suddenly, BOOM!!! Who hit who? Where’d the other car come from? Whose to blame!?!? Does it matter?!?!! With a true “No-Fault” system, each driver will file a claim on their own insurance after an auto accident, regardless of who is at fault, but this no fault idea only applies to certain items.
We’re going to back this story up a little bit though. Wayyy before this moment when you first got your car you had to get insurance. North Dakota State Law requires minimum levels of auto insurance when registering and operating a private passenger vehicle. Since North Dakota is a “No-Fault” state, this includes Personal Injury Protection, PIP, in addition to your state required liability limits and property damage limit.
Now back to the accident. This is where the importance of deciding your insurance coverage comes into play. PIP is designed to pay for first-party benefits, or your medical bills and certain other out-of-pocket losses in the event of an auto accident for you and for those in your car; regardless of who was at fault. If PIP limits are exceeded and you are at fault for the accident then each individuals health insurance may also come into play for everyone in the vehicle.
No-fault rules limit the claims you can pursue and restrict your right to sue for injuries or pain and suffering unless certain conditions are met. If these are met then your bodily injury liability limit may come into play to cover the injuries for those in the other vehicles when you are at fault. We’ll go into these conditions in a little more detail at the end of this blog.
For now, PIP seems to be a reoccurring theme, so let’s discuss this more.
Ok so what’s Personal Injury Protection, PIP, and why do we have to have it in this state?
As mentioned previously PIP is a component of your auto policy designed to pay for healthcare expenses for the policyholder and passengers associated with an auto accident. It is optional in many states, but again not in North Dakota as it’s part of the minimum level of coverage required, since it’s a No-fault State. The intention was to lower the cost of auto insurance by taking small claims out of the courts. PIP coverage also speeds up the process of getting care for a patient after an auto accident, by having some form of coverage in place and available to everyone involved in an auto accident, regardless of who is at fault or if the injured person has health insurance.
PIP can also extend to certain instances as a passenger or if you are hit by a vehicle as a pedestrian or cyclist. It may include some of the same coverages as your health plan but is specifically written for car-related injuries. Necessary medical procedures and reasonable expenses related to rehabilitation from an auto accident are included, such as operations, hospitalizations, lost wages, funeral expenses, or even some home care expenses.
You’re probably thinking, “OK. Now that we’ve covered some basic, and lengthy, information what does some of these coverage amounts look like?
The basic no-fault PIP benefit or minimum limit required for a North Dakota auto policy is $30,000 per person. This is available to anyone covered under the policy directly or indirectly. These include the policyholder, policyholder spouse, relatives living with the policyholder, or anyone driving the covered vehicle with permission and passengers in the vehicle. Based on your personal needs and risks you can even have higher PIP limits if desired.
We mentioned earlier how certain conditions must be met in North Dakota for a driver to sue over severe injuries from an auto accident. This is known as the tort liability threshold and for ND can include:
An important thing to remember is that the “No-Fault” system does not apply to vehicle damage claims, where the at-fault driver can be deemed liable for damages without limitations.
“No-fault” State can be misleading and having the correct coverage and limits in place can help ease the stress and burden accidents create.
We know this is a lot of information to take in, and while important, sometimes it’s hard to make getting the proper insurance a priority. We get it. Life is crazy on a normal day and right now we’re still trying to figure out what our normal, or “new normal” is.
You’re not alone and you don’t have to figure this or any of your insurance needs out alone; call, email or better yet stop into our Main Street Office today. We’re here to provide you peace of mind as we guide you to the products that fit your needs with affordability and dependability. Let us assist you in making sure you and your family are protected as you hit the road. In fact, that’s been our mission since 1986.
At Brad Johnson Insurance we’re here for you.
*North Dakota Insurance Department’s Auto Insurance has more details regarding the state’s car insurance rules and requirements
P.O. Box 249
123 N. Main St.
Crosby, ND 58730