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What is No-Fault Insurance?

2 car accident - Fremstad Law


Q. What is no-fault insurance?

A. In North Dakota, no-fault, also known as PIP or Personal Injury Protection insurance is a type of insurance where you (the driver or passenger) receive benefits regardless of whether or not you sue someone after sustaining bodily injuries in a motor vehicle accident.  No-fault insurance is just that-  you receive the benefits for which you are eligible regardless of who is the “at fault” party after a motor vehicle accident.

In North Dakota, an insured has a minimum of $30,000.00 in no-fault insurance benefits that may be used either for payment of medical expenses arising out of a motor vehicle accident or for some wage loss reimbursement arising out of not working during a motor vehicle accident.

Just like any other insurance claim, a claimant (i.e., you after getting injured in a car accident) are expected to notify their insurance carrier of the accident and the claimant has a duty to cooperate by permitting the insurer to inspect medical records, provide information to the insurer about the facts of the accident, and the like.

In the event that you do commence a lawsuit against another party who you believe is responsible for the accident and your injuries and you ultimately recover money from a jury verdict, no-fault benefits may be “backed out” of the verdict as a collateral source deduction.  For example:

John Johnson is driving a car and is hit by Sam Samson and John Johnson sustains $15,000 in medical expenses, all paid for by Johnson’s no-fault insurance.  Later, Johnson sues Samson and recovers a jury verdict of $40,000.00, and the jury specifically finds that Samson is completely at fault, and is responsible for Johnson’s $15,000 in medical expenses.  Usually, Johnson would only receive $25,000, because he already received $15,000 in no-fault benefits.

No-fault insurance can be very complicated.  North Dakota and Minnesota do no-fault differently.  Some states don’t do no-fault at all.  The point is that if you have questions about no-fault, it might be a good idea to talk to a lawyer, especially if you are considering your legal options.

Mark Western understands car accidents and has tried numerous car accident cases to juries. He is familiar with the judicial process and will help guide you through your most difficult moments.