Navigating the Maze of North Dakota Motor Vehicle Insurance

SBAND – Young Lawyer’s Section February 26, 2013
Navigating the Maze of North Dakota Motor Vehicle Insurance

Overview Liability No-fault (PIP) Uninsured (UM) & Underinsured (UIM) Collision/Comprehensive Other Coverages (Road service, etc) Policy may be broader than statute

No-Fault Insurance (PIP)NDCC 26.1-41 Mandatory coverage Covers all accidents except non-consensual use uninsured vehicle racing or speed contest intentional acts Must arise out of maintenance, use or operation of vehicle as a vehicle Covers vehicle occupants & pedestrians Vehicle is primary coverage

No-Fault Benefits $30,000 in total benefits available Medical expense Rehab expense Work/income loss @ 85% up to $150/wk Replacement service loss @ $15/day Survivor’s income loss Funeral expense @ $3500

Processing No-Fault Claims Client must complete application Client must submit documentation Medical bills Proof of wage loss Disability statements Benefits overdue if not paid w/in 30 days Illusory coverage? IME Coordination of benefits Limitations benefits paid = 2 or 4 years no benefits paid = 4 years after crash

Relationship to liability claim No-fault provides a “sure & certain” remedy (although partial remedy) Tradeoff is that clients give up right to sue unless meet “serious injury” threshold = $2500 in medicals, permanent disability, death etc. Liability claim has setoff for no-fault benefits paid

Liability NDCC 26.1-41-02(1) & (2), 39-08-20(1), & 29-16.1-11(2)(b) Covers damages sustained to third party because of “Fault” of insured Policy “follows” the vehicle ND: minimum limits $25,000/$50,000; also property damage coverage Who is an “insured”? Named Insured Members of Household Permissive User Employer Vehicle-employee driver

Liability Umbrella or excess e.g. permissive driver’s policy on different vehicle Typical exclusions or limitations non-permissive use named driver exclusion dropdown limits

Liability - Damages NDCC 32-03.2-04; 32-03-20 Property Damage Economic loss (wage loss, medical expenses, etc. ) Non-economic loss (pain, suffering, inconvenience, physical impairment, disfigurement, mental anguish, emotional distress, etc.)

Uninsured Motorist (UM)NDCC 26.1-40-15.2 Substitutes for no liability insurance Can’t use both liability & UM off of same vehicle Must establish tortfeasor is uninsured Phantom vehicle = physical contact or independent witness Arbitration vs. litigation

Underinsured Motorist (UIM)NDCC 26.1-40-15.3 When liability is not enough for damages “Difference in limits” vs. “add on” ND “trigger = difference in limits ND amount after trigger = add on MN = add on Damages after liability amount recovered & no-fault paid

UIM Pitfalls Exhaustion- ND vs. MN Who pays the gap? Priority of coverage Vehicle first “Extra” UIM (e.g. umbrella) 30 day notice of liability settlement to UIM insurer (substitution of check?)

Conflicts of Law Which law governs? Significant contacts test, with Leflar’s 5 “choice-influencing factors” Out of state driver in ND crash Policy issued & delivered out state Carrier licensed in ND? Carrier not licensed in ND Conformity Clause What about UM/UIM v. liability or PIP

Questions? If any questions, please feel free to contact: Mike Williams or Duane Lillehaug Maring Williams Law Office 800-492-5297 mwilliams@maringlaw.comdlillehaug@maringlaw.com

Navigating the Maze of North Dakota Motor Vehicle Insurance