Tort Law as it Relates to Auto Insurance: What Does This All Mean?

A tort is a civil as opposed to criminal wrong.  There are three types of torts but only one, a tort based on negligence, applies to auto insurance claims.  In order for a negligent tort to occur a legal duty must be owed, a breach of the duty had to have occurred, proximity between the breach and loss must have existed, and injury or damages must have resulted.

In the case of an auto “crash” the duty owed is prudence on the part of the driver, the breach is a failure to exercise care, the proximity is the time between cause and effect, and the negative health effects and/ or damaged vehicle complete the tort.

If your state interprets auto accidents as torts this means that negligence law is being applied to their treatment in the courts. 

If your state had adopted pure no-fault coverage and your vehicle was impacted by another vehicle, your own insurance carrier would pay your injury claim with no right to recover from the other party.  There would be no right to sue for the injury in court.  Currently there are no states that have adopted pure no-fault law.

Most states currently operate under some form of comparative negligence law. This means that fault is apportioned to each driver in an accident based on the percentage of liability for the “crash”.  When a lawsuit is filed in connection with a “crash” the judge and/or jury ultimately decide the appropriate percentage of liability attributable to each driver.

These following 6 states operate under a pure contributory negligence system; Alabama, the District of Columbia, Maryland, Minnesota, North Carolina and Virginia. In these states if you contributed in any way to the cause of the “crash” you are barred from collecting anything from the other vehicle owner for your injuries.

Alaska, Arizona, California, Florida, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, New York, Rhode Island, South Dakota and Washington follow pure comparative negligence law.  In these states who is responsible for an accident is determined by an apportionment of the percentage fault.  Injured parties collect a settlement based on the percentage of fault in a “crash” from each of the responsible parties.  In court this percentage is decided by the judge and/or jury.

If you have an accident in Arkansas, Colorado, Georgia, Idaho, Kansas, Maine, Nebraska, North Dakota, Oklahoma, Tennessee, Utah or West Virginia,  you are barred from recovery for your injuries if your responsibility amounts to 50% or more.

In Connecticut, Delaware, Hawaii, Illinois, Indiana, Iowa, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, Ohio, Oregon, Pennsylvania, South Carolina, Texas, Vermont, Wisconsin and Wyoming, you are barred from recovery if your fault is 51% or more.

The types of cases in which negligence applies is also limited by some states.  To get a clear idea on all the provisions of the law and how it applies log on to the web site for the Department of Insurance in your state.  Insurance is currently regulated at the state level and the Department of Insurance for your state has the responsibility for making this information available to the auto insurance consumer.

There is a lot of confusion around the concept of No-Fault insurance because the states which are known as no-fault states actually have insurance statutes which incorporate Tort Law.  There are three types of no-fault laws; the modified, add-on and voluntary plans.

Modified plans are the most common.  In this arrangement the right to sue is limited. In exchange for giving up the partial right to sue the auto insurance consumer is entitled to coverage entitled Personal Injury Protection, abbreviated as PIP.  PIP coverage entitles injured parties to medical expenses, lost income, survivor’s benefits, and post injury replacement services.  These benefits are paid out of the policy of the vehicle occupied and are considered first party payments.

Add-on plans do not limit the right to sue.  In these plans the Medical Payments coverage on the auto insurance policy is expanded to include lost income.

Voluntary plans offer the insurance consumer first party coverage benefits which are similar to PIP.  These plans are offered without changing the insurance statutes of the state.  The auto insurance consumer has a choice as to which type of coverage she/he wishes to purchase.  The choice which is offered is typically referred to as the Limited Tort vs Full Tort option.

In the Full Tort option “pain and suffering” is a part of the settlement of an injury claim presented by occupants of the insured vehicle.  It also applies to the insured and family members when passengers in another vehicle or when injured as pedestrians.

The Limited Tort option does not allow for payment of “pain and suffering” as part of the settlement.  There is a substantial savings in premium dollars for choosing this option, sometimes as much as 15%.

A distinguishing feature of No-Fault Laws is the threshold which must be attained to make a third party Liability claim. Sometimes this threshold is based on the type of injury and at other times it comes into play when medical expenses reach a set dollar amount.

Auto insurance policy provisions as to which policy should respond to an accident, which coverage is first to pay, whether a right to recover benefits exists or if subrogation is allowed, can be very complex in a no-fault state.  If you are traveling in a no-fault state and have an accident the location of the “crash” can actually modify how your policy responds.

For these reasons it is advisable to check the Department of Insurance web site in your state and any state within which you travel to assure that you know the law which applies.