Question about car accident insurance in USA

[canetoad]

I've wondered about this for a long time, so maybe I'll get an answer.

What is the situation in the USA if you are injured in a car accident? Is there a compulsory component of your yearly car registration that covers medical treatment for anyone injured in or by a vehicle or do you have to sue for compensation and/or costs?

There was a thread yesterday about New Zealand's universal accident protection. We have a scheme in Australia that does not go quite as far, but provides medical, rehabilitation and even home modification in the case of disability caused by a car, whether you are a driver, passenger or pedestrian. It is paid on a yearly basis, along with car registration and is compulsory nationwide.

Are such schemes in the USA under Federal control or state by state?

Ok, so it's blown out to about five questions, but I've been meaning to ask this for a long time.

[obxhead]

1. no, you are required to have liability insurance

yet another broken system in this country.

[canetoad]

4. OK, but what exactly do you mean

by liability insurance? Vehicle damage only?

[taterguy]

13. Liability = responsible for damage you do to others

[taterguy]

2. Varies by state, not compulsory

[Mz Pip]

3. You aren't covered

through your registration but should be through your insurance, which you are supposed to have. Some policies include "uninsured motorist" insurance so if you get hit by someone who doesn't have insurance, your expenses will be taken care of.

[canetoad]

5. Thanks, I sort of get the picture

It is optional to take out full comprehensive insurance or third party property damage here. If you are involved in an accident and uninsured, then you are up for the repair costs. No vehicle can be registered without paying compulsory third party insurance.

[Mz Pip]

17. If they can collect it.

Years ago Mr Pip got hit by a guy who had no insurance, an expired license and "borrowed" license plates. And no job. We didn't have to pay anything to get the car repaired but I doubt the insurance company had much luck recovering damages from that guy.

[thotzRthingz]

6. varies by state (since they "regulate" insurance companies, the FEDs must keep their hands off)

In the Commonwealth of Virginia... every auto insurance company I have ever had (more than 1/2 dozen in 40+ years) offers $1000 to $2000 MEDICAL coverage, automatically. I "bump" that up to $10,000 on each vehicle (I've always owned TWO of them) which gets "stacked" so there's really $20,000 worth of MEDICAL.

That MEDICAL is separate from LIABILITY (which is required, and does NOT cover the owner of the vehicle... and it only covers property damage & injury to OTHERS, not the owner's vehicle).

That MEDICAL it is also separate from COMPREHENSIVE/COLLISION (which covers the owner's vehicle, in the event of LOSS/damage).

That MEDICAL portion is "readily available money" which is used ONLY to cover MEDICAL issues for ANYONE involved in the incident (IOW: one does not have to wait for the "final settlement" of the incident in order to get PAYMENT for medical issues).

[canetoad]

7. Thank you. I'm still not sure

exactly what is covered by liability insurance.

For example, a pedestrian is hit by a speeding car and rendered quadriplegic. Who pays what?

[thotzRthingz]

8. "liability" covers OTHERS (not the owner or passengers within said vehicle) who may be injured...

In your example: if I were to hit a pedestrian... my LIABILITY coverage ($300K per individual/$500K per incident) would pay, up to the LIMITS of my coverage. Everyone is likely to have different levels of coverage (for example, in VA, the "minimum" we are required to purchase is much less than what I carry).

P.S. In my case, my insurance company would pay UP TO $20,000 for MEDICAL and then another $300,000 for the "injury" which I caused to the pedestrian. Potentially, that would be $320,000 MAXIMUM ... anything above that, once my insurance company paid the LIMITS of the policy which I bought ... I could be SUED for additional monies.

[canetoad]

11. That answered my question

As there are many different kinds of liability insurance. Sorry to seem obtuse :)

[safeinOhio]

10. If the speeder has insurance, his or her insurance is responsible, however it usually takes

a lawsuit to get them to pay the proper amount. If no insurance the uninsured fund pays for it and the driver goes to jail and bye, bye license. Some states have "no fault" insurance and the policy of the victim pays. 50 states and 50 laws.

[thotzRthingz]

12. re: "it usually takes a lawsuit to get them to pay the proper amount" -- thanks for adding that...

Unfortunately... INSURANCE companies always want to "settle" for LESS than they are obligated to pay. So yes, a LAWSUIT usually follows (especially with "ambulance chaser lawyers" wanting to get their meat-hooks into the payout)! <insert big disgusted sigh here>

[Ms. Toad]

20. Not necessarily a lawsuit - but often lawyers

which, in most cases, drive up the amount they paid because whatever they pay above and beyond expenses has to be 3-5x what the lawyer feels is necessary to pay for his or her time. That's not necessarily ambulance chasing - and in my case an attorney was only involved because the insurance company was unreasonable.

I was hit by a brand new driver who turned left into my car. Because my car was an older car it was "totaled" by the insurance company, (Totaling has nothing to do with the safety of the car to be on the road - it occurs when it would cost more to repair the car than the bluebook value of the car. In my state, totaling a car - regardless of the actual road-worthiness of the car, also means it gets a salvage title and no guarantee that it would ever be permitted on the road again, even if is safe to drive or can easily be made safe.)

I knew I did not want to buy a replacement car for what the insurance company would pay me - too much time to sort through the potential purchases, and too likely to be buying someone else's problem.

I told the insurance company ALL I was asking for was that they not total my car, and that they pay my medical bills (no more than $5000 - probably a lot less - a visit to an urgent care center, a couple of doctor's visits, some medication, and physical therapy).

They refused. Because they refused, I got an attorney involved. They ultimately agreed not to total the car. Fixing my car instead of totaling it for the the value they initially assigned to it cost them perhaps an additional $500, they paid my medical bills, and on top of that they paid $10,000 for my pain and suffering (a third of which went to the attorney).

Incidentally, my car served me for another 5 years, then went through the hands of two other family members for another 5 years before it bit the dust. I did have pain and suffering - but would have been perfectly willing to settle for nothing more than the medical bills to avoid the hassle of looking for a new car when money and time were hard to come by. All they needed to do in order to avoid totaling it was to find a way to evaluate its value slightly differently (slightly better shape, counting the value of the nearly new radio, etc.) The insurance company was not willing to do that.

I don't know how many people ended up in my shoes - but I have spoken to a number who tried to get what they were entitled to and were forced to get an attorney involved. That has nothing to do with ambulance chasing - but it does bump up the price of insurance for everyone.

[treestar]

22. hehe speaking as a lawyer once involved in this

"the proper amount" is not that easy to determine, especially with "pain and suffering" - if without the lawyer you get 10K but with the lawyer you get 30K but have to pay 33% to the lawyer, you still did better with the lawyer, and most people would. With experience the lawyer knows how to value the case, a person has only their own case to go on (and always thinks it is worth way more than it is anyway).

[gvstn]

15. I'm not sure exactly how it works in practice.

My state requires:

Minimum coverage for any one accident is:

* $15,000 for bodily injury or death of one person
* $30,000 for bodily injury or death of two or more persons
* $10,000 for injury to or destruction of property of others

No insurance company will write a policy with those low numbers. I think the lowest you can find someone to write is 25,000/50,000/10,000.

I assume that this liability insurance is for damage to vehicle and medical for the other driver. Thus %15,000 for damage to one person and car. Of course this won't pay for much but I think people just sue the insurance company to try to get more if the insurance limit was inadequate. Don't know if that works but I think that is what happens.

PLEASE feel free to correct me. I really don't know how things actually work in the event of an accident. I don't use the minimum levels of insurance.

[depakid]

9. It's considerably different that what we get with Rego

Depending on your state, if you're in an accident your insurance policy will cover a minimum amount of personal injury protection for you and passengers (it's usually not much- and for anything but comparatively mild to moderate injury it won'r be enough to cover the expenses) . If the other motorist is at fault, you have to make a claim against their insurance (and there's some basic protection in your own policy against uninsured drivers).

For major injuries and accidents, you will have to make a claim and all too often will have to get a lawyer to recover damages- and there's a limit to what and how much driver's policies will cover- or what the insurer will offer.

Other than that, unless you have private health cover (the excess in the states is extreme) or are 65 or older- or very poor, you're left on your own.

Word of advice: while Australians can travel to a number of countries that have reciprocal health agreements with Canberra- do NOT visit the United States without purchasing travel insurance. If you're in an accident or are injured or fall ill, you may end up bankrupting yourself and your family.

[canetoad]

14. Glad you chimed in

being familiar with the systems in both countries. It seems a bit hit or miss (no pun intended)as to whether people injured in or by a vehicle get medical coverage.

And I'm not planning on going anywhere. Ambling along the banks of the Yarra with the dogs does me fine and I'm up for a reco motor for the Gemini next week.

[depakid]

16. Banks of the Yarra..

:thumbsup:

[canetoad]

18. Same river, 30k upstream

I'm near Montsalvat.

[treestar]

23. Add that if the person has a minimal policy then they are still liable

for the amount your claim might exceed the policy. but usually the problem is collection - the insurance company is the "deep pocket." But if your case is worth over 100K while the person had a 100K policy limit, nothing you can do but try to collect from the person. Which can be difficult because besides the policy, the defendant could be "judgment proof."

So query if the hypothetical traveling Aussie caused an accident, the problem the U.S. plaintiff would have if serving Aussie the lawsuit to begin with, and even if able to do that, collecting the judgment would be a real problem. Unless there is some treaty making judgments of U.S. state courts somehow collectible in Australia - even if there is that, it would still be really hard to collect. Child support is the most supported judgment and that is hard to collect internationally. So they'd probably use their Uninsured Motorist policy.

[depakid]

24. There are means to collect international judgments- though they're not as easy as interstate

and you're right, lot of attorneys wouldn't bother to jump through the hoops. Makes sense then to check the benefits of any policy that you buy when travelling abroad and what the local insurance requirements might be.

Wouldn't want to drive across the border and end up in a Mexican jail or something- that's for sure

[roamer65]

19. Michigan's MCCA is pretty generous.

It covers just about all of the medical costs related to an auto accident and its unlimited in its duration. If you are permanently disabled and require nursing home care...it covers it...unlimited.

Downside is that its cost continues to grow...year after year.

[treestar]

21. Each state has rules

Now many have an auto insurance requirement.

Some states have "no-fault" insurance which is supposed to pay the person's own medical bills regardless of who is at fault in the accident. Insurance companies try to get this out of as many states and they can, hoping to eliminate "pain and suffering" damages.

In a fault state, you have to sue - though you could settle with the at-fault party's insurance company if the liability is clear and the insurance company actually admits it. The insurance policy includes a defense clause, so it you are the at fault driver and get sued, they pay for the lawyer to defend you, and pick the lawyer. Some of the insurance companies have in-house lawyers for this purpose.

In many states "pain and suffering" is an amount of damages you can collect - it compensates you for your pain and suffering and thus conservatives consider it a "windfall" and refer to the jury system as a "lottery." All of this is to try to get "tort reform" since allegedly all of these payouts are just expensive windfalls that enrich lawyers, etc.

If you have personal medical insurance that covers the bills, that insurance company can sue a liable defendant to get reimbursed.