You are required to have at least no-fault auto insurance and personal injury protection if you live in a no-fault state. If you have a car accident, it is the law that you must file a claim with your insurance company. In some cases of severe injury, you can sue in court. This is called the tort liability threshold. Threshold here means conditions relating to how severe your injury is. The verbal and monetary thresholds stem from the limited tort threshold. Depending on the no-fault state that you live in, you can choose your threshold in which you wish to sue.
The No-Fault and the Add-On States
Twelve states and Puerto Rico have true no-fault laws. True no-fault states limit your right to sue after an accident. Eleven other states have add-on laws. These add-on laws simply allow first-party benefits to be added to the traditional tort liability system. According to the Insurance Information Institute, first-party coverage may not be mandatory and the benefits may be lower than in a true no-fault state.
Here's the listing of true no-fault states: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Puerto Rico, and Utah. Add-on states are: Arkansas, Delaware, District of Columbia, Maryland, New Hampshire, Oregon, South Dakota, Texas, Virginia, Washington, and Wisconsin.
Problems with No-Fault
Michigan has the highest auto insurance premiums in the nation due to having unlimited lifetime medical benefits. Its no-fault policy has come under fire the past few years and the state is actively seeking insurance reform. Colorado, on the other hand, has seen insurance premiums decline due to repealing its no-fault law in 2003. Five years later, the average savings for car insurance were 35 percent lower, around $322 per vehicle.
Verbal and Monetary Thresholds
You can't file a suit against another driver involved in the car accident unless your injuries exceed the threshold for your state. These kinds of injuries generally involve loss of bodily function or losing an appendage. Florida, Michigan, New Jersey, New York, and Pennsylvania have verbal thresholds.
Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota, and Utah have monetary thresholds. A monetary threshold is the amount of money that your injury has incurred. For instance, you cannot sue for the bills for minor whiplash. You could sue for the costs coming from a leg amputation, however.
If you've had an auto accident with a severe enough injury to sue for damages, consult your car accident attorney for legal advice. You may have recourse specific to your state as laws are continually updated.