MASSACHUSETTS AUTO ACCIDENT LAW
Motor vehicle claims arise when someone is injured or killed as a result of the negligent operation of a motor vehicle. Motor vehicle accident victims typically include other motorists, passengers, pedestrians or bicyclists. Motor vehicle accidents are the single largest category of personal injury related claims in the Commonwealth of Massachusetts due to the high volume and congestion of motor vehicle traffic in the state. Some also feel that Massachusetts, Boston in particular, breeds an aggressive form of driving that contributes to the frequency of roadway accidents.
Massachusetts auto accident law covers two large intertwined bodies of law: liability law and insurance law.
Liability is the substantive law of negligence and damages. This addresses the questions of who was at fault for causing an accident and what are the injured person’s damages. Auto liability tracks the elements of a negligence claim. To recover monetary damages, the injured person must establish that the operator of a motor vehicle breached a duty of care on the roadway and thereby caused injury. As in all negligence claims, the motorist owes a duty of reasonable care, that is, a duty to act reasonably in the manner and method of operation of a motor vehicle on the roadways. In the arena of auto accident liability, the existence and scope of a motorist’s legal duties are often specifically addressed by Massachusetts driving laws and regulations that define moving violations and prohibit certain conduct like crossing a double-yellow median line or speeding. The violation of a motor vehicle law or regulation can constitute evidence, usually strong evidence, of negligence. Victims of such negligence are entitled to monetary compensation for all related damages and losses. These usually include bodily injury, disability, pain and suffering, medical expenses and lost wages or lost earning capacity. These issues are either settled with the defendant and her insurance company or they are presented to a jury at trial to determine liability and damages.
Auto insurance law is a complex area of law that addresses whether and how a particular insurance policy applies to a given accident. Whereas liability will establish fault and total damages, auto insurance law often determines the actual bottom-line outcome of a motor vehicle claim. This area of law deals with the availability of insurance benefits.
II. AUTO ACCIDENT LIABILITY.
The operators of motor vehicles on Massachusetts roadways owe others a duty to act reasonably. An operator of a motor vehicle must exercise reasonable care under the circumstances. Reasonable care is the degree of care “commensurate with the probable harmful consequence that might reasonably be expected to result from the lack of such care.” Reasonable care is that amount of care an ordinary and prudent person would exercise under the circumstances. An operator of a motor vehicle using a public way owes a duty of ordinary care at all times to avoid placing herself or others in danger and to exercise ordinary care at all times to avoid a collision. In addition, the operator owes a duty to keep a proper lookout and make reasonable observations as to traffic and other conditions. Whether negligence exists is almost always a question for the jury to decide.
This wide-ranging duty covers every aspect of a vehicle’s safe maintenance, handling and operation. What is reasonable depends on the circumstances and what a jury’s common sense dictates.
Usually the scope of a motorist’s duty can be defined by rules of the road as set forth in the state’s driving laws, the state highway regulations, the Registry of Motor Vehicles Driver’s Manual and any applicable municipal ordinances.
The most frequent traffic safety infractions that result in auto accident claims include one or more of the following:
Speeding, G.L. c. 90, § 17
Failure to yield the right of way G.L. c. 89, § 8
Failure to maintain safe distances
Failure to yield to pedestrians in a crosswalk, G.L. c. 89, § 11
Crossing centerline, G.L. c. 89, § 1
Changing lanes, G.L. c. 89, § 4
Negligent maintenance of the vehicle
Failure to secure cargo
Operating under the influence, G.L. c. 90, § 24
Failure to obey traffic signals and signs
Operating without a license, G.L. c. 90, § 10
Intersection, G.L. c. 90, § 14
Left turn, G.L. c. 90, §§ 14, 14B
Special hazards, i.e., traffic or weather, G.L. c. 90, § 17
Signals for turning, G.L. c. 90, §§ 14, 14(b)
Right of way and right to turn on red, G.L. c. 89, § 8
Stop and yield signs, G.L. c. 89, § 9
Driving on multilane highways, G.L. c. 89, § 4A
Emergency vehicles, G.L. c. 89, §§ 7A, 7B
Driving on state highways, 720 C.M.R. § 9.00
If a jury finds that the defendant motorist violated some traffic safety statute, ordinance or regulation and that the occurrence of the accident was one of the things that the statute was designed to prevent, then the violation can be considered as some evidence of negligence. It is not, however, conclusive evidence of negligence. It is not necessary for the defendant to have been cited, charged or convicted of a violation to be deemed negligent. Nor does the fact of a citation, charge or conviction alone suffice. If a violation of a traffic statute, regulation or ordinance was proved, the jury may consider that fact, together with all the other circumstances, in determining whether the defendant acted negligently. It is important to reiterate, however, that a jury does not have to find a violation of law in order to hold the defendant liable for negligence in causing a plaintiff’s injuries with a motor vehicle. The violation of any one of these rules of the road can be used as evidence of negligence in a liability case.
Some accidents, though, do not implicate any written rules of the road. These will be governed by reference to the general common law rules of negligence. For example, there is no set rule about how to parallel park a car. But if in the process of doing so you back over a pedestrian, a jury will judge the facts of whether or not your conduct was reasonable considering all of the circumstances including the weather, the lighting, the traffic, the presence or absence of a cross-walk, your destination, your state of mind, the pedestrian’s destination and state of mind, the working condition of your rear-view mirrors, the conspicuity of the pedestrian and/or any sight-line obstructions and causes thereof.
Liability for an auto accident rests primarily with the negligent operator who caused the accident. In addition, there are two situations where the registered owner of a motor vehicle can also be held liable even though he was not driving it at the time of the accident. The first is a legal presumption of control. Massachusetts law presumes that the registered owner of a car exercises legal control over those who drive it, such as friends and family, though often this is not the case. The registered owner can avoid liability with sufficient evidence that he did not control the driver’s operation of the vehicle. But the burden of proof on that issue rests with the registered owner. Letting a friend borrow your car to run some errands is not enough. The control must extend to the where, when and how of the borrower’s use of the vehicle.
Vehicle owners can also be liable for the conduct of others under the legal doctrine of “negligent entrustment.” The duty of reasonable care includes a duty to refrain from lending one’s vehicle to a person whom the owner knows, or reasonably should know, is incompetent as an automobile operator. This question focuses on the borrower’s driving skills and physical condition. Negligent entrustment can be found where the negligent operator has previously caused similar accident or received multiple driving infractions. It can also arise where the operator has a known physical disability that causes the accident, such as bad eyesight, a volatile heart condition or a seizure disorder that cannot be controlled with medication. An automobile owner can also be held liable on evidence that he lent the vehicle to someone who was visibly impaired or intoxicated.
III. DAMAGES: VALUING AN AUTO LIABILITY CLAIM.
Valuing an auto liability claim is much like valuing any other type of personal injury claim, but with a few unique aspects. The process of valuing an auto claim is an art, not a science. It is mix of quantitative (financial damages) and qualitative (pain and suffering, disability) damages that, through the collective experience of the insurance claims industry and the plaintiff’s bar, has produced a general understanding of the ranges of monetary value for any particular claim. Of course, each claim is unique and requires particular attention to its nuances and circumstances.
The process begins with the question of liability. If liability is reasonably clear, like in a rear-end collision or a pedestrian struck in a cross-walk, then valuing a claim can be done based solely on the damages. If however liability is disputed or there is a chance that the plaintiff could be found partially at fault for the accident, that will have to be factored into to the analysis as well.
The overarching question in valuing an auto claim is always: what would a jury consider to be the “fair and reasonable” monetary measure of the claimant’s tangible and intangible losses. The jury will be told that their goal is to try and place the injured person in the same position they would have been in had the injury not occurred. In personal injury litigation generally, the allowance of damages is based on the theory of compensation. Under this theory, the plaintiff is entitled to an award equal to the monetary value of the actual loss proximately caused by the wrongful acts of another. The intent of the automobile reparations system is to compensate accident victims to “make them whole.” Compensatory damages thus seek to place the plaintiff in the position in which he or she was prior to the accident. The plaintiff is entitled to those damages that fairly compensate for all past and future loss and injuries suffered or that will be endured as a result of the accident. To recover for future harm, it is necessary to establish a “reasonable probability” that the medical condition, disability or harm will persist.
Personal injury damages can be divided into two general categories: special damages and general damages.
A. Special Damages.
Special damages are quantifiable financial losses. These can include medical expenses, lost earnings and miscellaneous out-of-pocket expenses.
1. Medical expenses.
A plaintiff may recover reasonable medical and hospital expenses incurred in treating injuries caused by the defendant’s negligence. It is not necessary for the plaintiff to have actually paid the expenses out of pocket. It is sufficient that they were incurred on the plaintiff’s behalf, even if they were ultimately paid by an auto insurer, a health insurer, a worker’s compensation insurer or some publicly funded health care payor like Medicare or MassHealth. The plaintiff is still entitled to recover all incurred medical expenses because some or all of them may need to be repaid from the plaintiff’s recovery. This issue of repaying medical expenses after a monetary award is discussed in the section below on medical subrogation and medical liens.
Medical expenses are proved by submitting the medical bills at trial.
2. Lost earning capacity.
When an employable person is disabled from work or from pursuing work because of a personal injury, that person has sustained a loss of earning capacity. When the loss is significant, usually representing more than a couple of weeks, the plaintiff will be able to seek compensation for that loss.
Loss of earning capacity is not limited to the amount of the plaintiff’s loss of wages or income at the time of his or her injury. It is also the reduction or loss in one’s ability to earn a living. Lost wages are only one aspect of the evidence of such loss. When calculating the value of the plaintiff’s lost reasonably expected net income, the fact finder will consider what type of person the plaintiff is, the talents the plaintiff has, the contributions the plaintiff has made and whether the plaintiff’s income could reasonably have been expected to increase or decrease as time passed.
This evidence is usually presented through the plaintiff’s past tax returns, employment and earnings records and the testimony of an economist who will crunch the numbers and give a total estimate of past and future lost earnings.
3. Miscellaneous out-of-pocket expenses.
These include everything from co-payments for hospital and doctor visits, payments for prescription drugs, medical equipment or even the cost of a funeral and burial service in a wrongful death claim.
These are proved by submitted the receipts for these expenses at trial.
B. General Damages.
General damages are non-economic harms including physical trauma and bodily injury, psychological harm, pain and suffering, disability, scarring and disfigurement, emotional distress, loss of enjoyment of life, loss of consortium and even wrongful death damages.
1. Bodily injury.
Bodily injuries include lacerations, contusions and bone fractures along with more complex injuries to internal organs, traumatic brain injuries, concussions, spine and neck disc injuries, damage to the central nervous system, reflex symptom dystrophy (RSD), fibromyalgia and musculoskeletal pain syndromes.
Bodily injury is usually proved with a plaintiff’s medical records, eyewitness testimony and if needed expert medical testimony from treating and consulting medical professionals. This evidence is used to demonstrate the nature and severity of the injury along with its permanent or long term effects on the person’s ability to function normally.
Under Massachusetts law, a claim for bodily injury arising out of a motor vehicle accident must involve bills for medical treatment in excess of $2,000 in order to make a claim. There are a handful of exceptions to this limit discussed below.
2. Scarring and disfigurement.
A plaintiff is entitled to recover damages for scarring and disfigurement caused by the defendant’s negligence. Scarring and disfigurement is usually presented through photographs of the injury at various points in the healing process along with an actual showing to the jury at trial. There may also be medical testimony as to the permanence of the condition and whether future surgery will be needed or effective.
3. Conscious pain and suffering.
Past and reasonably expected future pain and suffering is also compensable. The evaluation of pain and suffering and of the other aspects of the personal injuries requires a determination of how badly the plaintiff was hurt, the nature, extent, severity, permanency and effect of the injuries. The sum of money must be an amount that fairly and reasonably compensates the injured person. The jury may consider the age, health, habits and condition of the injured party before his injury as compared with his condition as a result of the injury.
Potential sources of evidence regarding pain and suffering include the plaintiff’s own testimony as to the nature and extent of the pain, medical expert evidence to prove any probable future pain and suffering, medical records and any pharmaceutical records of the administration of pain medicine.
Life expectancy or actuarial tables published by the United States Census Bureau can be used to demonstrate the likely length of time for future pain and suffering assuming there is evidence that the injury will be permanent.
4. Psychiatric and psychological injury.
In some traumatic injury cases, the plaintiff will sustain a specific psychological injury that is treated and diagnosed by a mental health professional. These can include neuropsychological deficits such as amnesia, loss of memory, traumatic brain injury, loss of smell and photophobia. Psychiatric damages include post-traumatic stress disorder, depression or anxiety related to the event.
When supported by the proper type of medical documentation, these injuries are also compensable in a personal injury claim.
5. Exacerbation of pre-existing condition.
If an injury aggravates or triggers a pre-existing condition of the plaintiff, then the plaintiff will be entitled to recover for the difference between what the plaintiff’s condition would have been absent the accident and what the plaintiff’s condition is or was or will be because of the accident. The law recognizes that different people’s bodies and minds can have different reactions to the same physical harm or trauma based on their age, physical condition and medical history. If a defendant’s negligence causes an aggravation of a pre-existing medical condition or triggers a dormant medical condition in a particular plaintiff, then the plaintiff is entitled to recover to the extent that their unique condition or disease has been aggravated, increased, augmented or activated.
For instance, if a motorist with pre-existing but asymptomatic spinal disc bulge at C6-7 is rear-ended on the highway and the trauma triggers nerve pain symptoms, the plaintiff will be entitled to recover for the aggravation of this prior condition. And it is not necessary that the prior condition is asymptomatic to recover. Take a person with mild depression who suffers facial scarring and disfigurement from a shattered windshield in a highway accident and is later diagnosed with severe depression caused by the embarrassment from the scarring. Assuming liability, that unfortunate person would be entitled to damages for the exacerbation of her prior depression.
Hence the legal aphorism that “you take your plaintiff as you find them.” This is also referred to as the egg-shell plaintiff rule. A defendant whose negligence causes a greater than normal injury to a particularly brittle or frail plaintiff is likewise liable for all of the harmful results. Thus if an elderly woman with osteoporosis is knocked to the ground in a low impact collision with a taxi cab and her hip shatters, the taxi cab is responsible for all of her resulting damages even though the average person would have probably been unharmed by the impact. The same principle would apply where a cardiac patient suffers a heart attack from the stress of a bus accident. The defendant bus company would be liable for causing the heart attack, so long as the medical evidence can causally relate the two events.
An aggravation of a pre-existing condition can be proved with the plaintiff’s prior medical records, lay testimony from the plaintiff or family and medical expert testimony preferably by a treating or examining physician.
7. Loss of enjoyment of life.
The quality of an individual’s life is often measured in a court of law by her engagement in the community affairs, her personal interests and hobbies and participation in family, recreational, sporting and social activities. The diminution of these quality of life issues are compensable. This type of loss is established by the plaintiff’s own testimony regarding the things that he or she loved to do before the accident – but can now no longer do because of the accident.
8. Loss of consortium.
In Massachusetts, one spouse may recover consortium damages that arise out of injuries suffered upon the other spouse. These are described politely as the loss of marital services, society and conjugal affections. The spouse may be compensated for the loss of companionship and affection and loss of sexual enjoyment he or she may have had and may continue to experience as a result of the injuries to the spouse.
Children and parents can also experience loss of consortium. Dependent children have the right to recover for the loss of services, society, companionship and care of their parent. The injured parent need not be the principal wage earner in order for the child to recover for loss of parental society. It is sufficient if the child is living in the injured parent’s household and is dependent on the parent for management of the child’s needs and for emotional guidance and support. The same holds true for a dependent (elderly) parent who suffers a loss of consortium due to an injury to his (adult) child.
In deciding this issue, the jury may consider as evidence of damage evidence showing disruption and change in the family life, including the injured family member’s reduced ability to participate with the family in church activities and community service work, social and recreational activities and family services and care, such as shopping errands and household projects.
9. Wrongful death and punitive damages.
When someone dies as a result of a motor vehicle accident, his legal representatives are entitled to recover wrongful death damages. These include damages personal to the decedent like conscious pain and suffering prior to the time of death. They also include damages to the estate’s legal beneficiaries and family members like loss of companionship and support.
Generally in Massachusetts, punitive damages are recoverable in more extreme wrongful death cases involving gross negligence. Gross negligence occurs when the defendant acts with reckless disregard. That is, in the face of a known risk the defendant persists in conduct involving a high degree of probability that substantial harm would result to another. In order to support a finding of gross negligence, the conduct of the defendant must be characterized by a high degree of culpability and indifference to a legal duty. Gross negligence is substantially and appreciably higher in magnitude than ordinary negligence. Examples of gross negligence in auto cases might include driving at high speeds through stop signs in a residential neighborhood or drunk driving the wrong way down a one way street.
There is no specific limit to punitive damages in wrongful death. They are designed to affirmatively punish the wrongdoer for willfully ignoring a known danger to someone to who a legal duty is owed.
C. Common Damages Issues.
1. Objective vs. subjective injuries.
Bodily injuries are broadly classified as either “objective” or “subjective.” Objective injuries are those that can be perceived by either sight or touch or that can be demonstrated by means of a diagnostic test like an x-ray, MRI, CT scan or EMG. Examples include scars, broken bones, bulging or herniated spinal discs and nerve damage. Objective injuries are easier to prove and harder to argue against because they are independently verifiable with hard medical evidence.
In contrast, subjective injuries can usually be perceived only by the injured party. As a result they are often disputed by defense attorneys and their medical experts. Examples include muscle strains and sprains in the back, neck and shoulders, along with chronic pain syndromes that cannot be measured quantitatively. These so-called soft-tissue injuries make up the bulk of injuries caused by motor vehicle accidents. Proving the existence of that which cannot be seen is difficult, but it can be done with the help of an experienced doctor and credible and reasonable testimony from the injured person.
Great care must be taken in presenting subjective injuries to a jury. Juries have grown skeptical of these damages and it is imperative to be forthright and candid about them. If a jury senses, rightly or wrongly, that a plaintiff is overreaching or exaggerating the nature and extent of their injuries, the result can be harsh.
2. Degenerative disc disease.
A common problem with spinal and bone joint injuries in a motor vehicle tort case is determining whether that injury is related to the trauma suffered in the accident or is actually a preexisting degenerative disorder. Most adults who have led an active life will have some form of degenerative disc disease show up on an MRI even if they feel no symptoms beyond morning stiffness and some soreness after strenuous activity. A degenerative disorder of the spine (e.g., spondylosis, osteoarthritis, osteophyte formation) is one that develops gradually over time as a result of repeated trauma or the wear and tear of life. The key is separating this low-level type of organic disorder from traumatic injuries caused in a car accident.
3. Post-accident injuries.
As with the exacerbation of preexisting injuries, if a plaintiff suffers subsequent injuries because of his disabled condition from a motor vehicle accident, then the defendant can, in principle, be held liable for the subsequent injuries. For example, if a plaintiff suffered a broken leg in a car accident caused by the defendant and later falls while struggling with crutches, the defendant may be liable for the subsequent injury. Though the circumstances vary in each particular case, issues of comparative negligence frequently arise with post-accident injuries. Typically, the defense will try and argue that the injured person was “trying to do too much” or was somehow exceeding doctor’s orders.
4. Medical expense threshold requirement.
Under General Laws c. 231, § 6D, a plaintiff in auto accident case can recover damages for pain and suffering only if the reasonable and necessary expenses incurred in treating such injury exceed $2,000. Given the current cost of health care, especially emergency health care and ambulance service, this threshold requirement is usually not an issue.
There are also several exceptions to the rule in cases of:
b. The loss of a body part;
c. Permanent and serious disfigurement;
d. The loss of sight or hearing; or
e. A bone fracture.
5. Negligent medical treatment.
Consider the following situation. A plaintiff suffers a head injury in a motor vehicle accident that requires emergency surgery to drill burr holes in the skull to relieve pressure on the brain from a hematoma. During the operation, the neurosurgeon negligently drills the burr hole too close to the motor cortex resulting in complete and permanent paralysis. The question arises as to whether the defendant motorist can be held responsible for the paralysis resulting from the negligent medical treatment.
In Massachusetts, the answer is yes if the jury find that the paralysis was a natural, probable and foreseeable result of the original negligence of the defendant motorist. Thus, the damages sustained as the result of the medical malpractice can be attributed to the motor vehicle defendant who made the medical care necessary. The medical negligence does not constitute an intervening or superceding cause so long as the damages are the natural, probable and foreseeable result of the original tortfeasor’s negligence. This determination is highly fact-specific. In the above example, a jury would probably be warranted in attributing the paralysis to the defendant motorist. In contrast, one well known case held that a doctor’s negligence in operating on the wrong limb of the plaintiff was not a proximate result of the first injury and was the result of a superseding independent cause of action for which the original defendant motorist could not be held responsible.
In certain situations, the injured motorist may consider bringing claims against both the defendant motorist and the negligent medical care provider. This decision will depend on the nature of the injuries and the degree of relative fault.
6. Plaintiff’s duty to mitigate damages.
A plaintiff claiming injury has a duty to use reasonable means to mitigate her damages. Where the injured plaintiff fails to use reasonable care to minimize damages, she cannot recover from the wrongdoer for the injurious consequences of such failure. Most often, this occurs in the context of a plaintiff’s failure to follow medical instructions or recommendations, such as to remain non-weight bearing on an ankle fracture or to undergo a particular treatment course including surgery. In such an instance, the plaintiff’s recovery will be limited to those damages caused by the defendant’s negligence. The plaintiff would not recover for any damages arising directly from her failure to follow medical advice or to obtain proper medical care.
For example, where a treating physician recommends surgery as a viable means of treating the plaintiff’s condition and a reasonably prudent person would submit to such an operation for improvement of a condition like that of the plaintiff, a refusal of surgery by the plaintiff would be evidence of an unreasonable failure to mitigate damages. There is no duty on the part of a plaintiff, however, to submit to treatment where the outcome is uncertain.
5. Collateral source evidence.
As a general rule, the defendant is not allowed to present evidence that the plaintiff received compensation for his or her injury from any other source such as an insurance company, workers’ compensation carrier, health insurer, life insurer or disability insurer. Courts exclude this evidence because they are worried that juries will be confused and assume that the plaintiff has already been compensated fully for her injuries and make adverse (and incorrect) inferences. Collateral source evidence is also prohibited because a plaintiff is entitled to compensation for all damages proximately caused by a defendant’s negligence, and the defendant should not benefit from his or her wrongdoing. Moreover, oftentimes some portion of collateral source payments may need to be reimbursed and it would not be fair to have the plaintiff double-charged for such benefits.
An exception to the rule exists where there is evidence of malingering and where the plaintiff volunteers testimony as to her “penurious circumstances” allegedly resulting from her injury.
6. Comparative negligence.
Under G.L. c. 231, § 85, a motor vehicle negligence claim will be barred completely where the plaintiff’s negligence is greater than the total negligence of the person or persons against whom recovery is sought.
If the plaintiff’s negligence as compared with the total negligence of all the defendants is 50 percent or less, the plaintiff’s damages are reduced in proportion to the plaintiff’s negligence.
7. Seat belt use.
In Massachusetts, a plaintiff’s failure to wear a seat belt at the time of a motor vehicle accident cannot be used as evidence of comparative negligence.
However, a plaintiff’s non-use of a seat belt can potentially come into evidence on the issue of causation and damages if the defendant can show that the plaintiff’s failure to wear a seat belt caused some or all of the injuries.
8. PIP reduction.
As discussed below in the section on auto insurance law, most insurance polices afford personal injury protection coverage for no-fault payment of up to $8,000 in medical bills, lost wages or replacement services. Pursuant to G.L. c. 90, § 34M, the amount of any judgment that may be entered in an automobile accident case will be reduced to the extent that damages for expenses and loss otherwise recoverable as a PIP benefit are included in any such judgment. In other words, any judgment entered will be reduced by the amount of PIP benefits already paid. In certain situations, the PIP reduction can be avoided where the case is settled rather than tried.
9. Settlement by joint tortfeasor.
Under G.L. c. 231B, § 4, a settlement by one or more joint tortfeasors reduces the claim against the other tortfeasors to the extent of any amounts paid. This evidence of settlement will be excluded at trial, but after a verdict for the plaintiff the judge will make the appropriate reduction in the amount to be awarded by subtracting the settlement amounts from it as part of a “set-off”. The stated reason for the reduction is to prevent a plaintiff from being overcompensated for his injuries.
10. Additur and remittitur.
Normally, a trial judge does cannot alter a jury award if the judge feels it was too high or too low. This is only permitted in extreme circumstances where an award is unreasonable, unjust and “greatly disproportionate” to the damages proved at trial. An additur is an order for a new trial unless the defendant accepts an addition to the amount of the verdict. A remittitur is an order for a new trial unless the plaintiff accepts a reduction in the jury verdict.
Pursuant to G.L. c. 231, § 6B, pre-judgment interest at the rate of 12 percent per year from the date the action was filed is added to any monetary award for personal injuries.
Pursuant to G.L. c. 235, § 8, post-judgment interest is added at the same rate, 12 percent per year.
IV. Negotiating With Insurance Adjustors.
There is a unique process for attempting to settle auto accident claims, and the nuances vary according to which insurance company one is dealing with. Due to the high volume and frequency of auto-related injuries in Massachusetts and beyond, auto insurers are essentially in the business of evaluating and resolving personal injury claims because most of them involve reasonably clear fault. There are teams of professional insurance adjusters in every major company who handle hundreds of such claim at any given time. Some insurers even use computer programs that factor in various aspects of one’s damages and recent jury awards for similar cases to evaluate a claim. Of course, the business of insurance is risk management, and the predominant approach these days unfortunately is to try to deny fair reimbursement for harm caused by their insureds. This is done through low-ball offers, stall tactics and nickel-and-dime negotiations that have almost made a mockery of the settlement process. When dealing with some of the more notorious insurance companies, many attorneys simply forego this process and put a case directly into suit without giving an insurance adjustor the opportunity to insult the injured victims.
The process of presenting, negotiating, and settling a personal injury case with auto insurers is not dictated by a uniform set of rules. Each insurer has its own procedures for handling and processing claims. Custom and usage in the processing of these claims and familiarity with particular plaintiff’s attorneys goes a long way in this arena. The process generally begins with the plaintiff’s attorney gathering all relevant documents such as police reports, witness statements, scene photographs, vehicle damage appraisals and photographs, injury photographs, ambulance and medical records and reports, diagnostic films and medical bills, and any applicable insurance policies and policy coverage pages. The attorney will then analyze and synthesize these records to develop bases for liability and damages. In cases of reasonably clear liability, the next step is to send copies to the insurer in a demand package that will present the claim for damages in a light most favorable to the claimant. The demand package will typically include an initial monetary demand for settlement that will be a starting point for negotiation.
The insurance adjuster will then analyze the file and perform any due diligence investigation it deems necessary under the circumstances. This can include an interview of its insured driver or any witnesses. The insurance company may also retain a medical expert to review the medical records and/or to conduct a so-called independent medical exam (IME), though there is never anything “independent” about them. IMEs are typically conducted by doctors who, for a few hundred dollars, will write a report saying that an injured motorist is just fine and perfectly capable of carrying on with their normal activities.
Unless liability can be genuinely disputed, though, there will usually be an initial offer of settlement that is a low-ball offer. This is par for the course. The parties then negotiate back and forth within the policy limits until they reach a mutually agreeable figure. If this doesn’t work, then the claimant can file suit and let a jury sort things out. Cases will also go into suit when there is a serious dispute as to liability or if the insurer is acting in bad faith by stalling for too long or by standing pat at an unreasonably low settlement offer.
V. Unfair Claims Settlement Practices.
Throughout the claims process, an insurer doing business in Massachusetts has an obligation to conduct itself in a proper and reasonable manner. Failure to do so can give rise to a separate legal claim directly against the insurer for unfair settlement practices pursuant to G.L. c. 93A and G.L. c. 176D. Chapter 176D specifically describes the type of conduct that would constitute an unfair claim settlement practice. The most common example in auto cases is an insurer’s failure to make a reasonable offer of settlement when liability is clear. Another is where an insurer repeatedly delays or fails to communicate with the claimant or counsel in a prompt and timely manner.
Claims handling practices vary from insurer to insurer. Some are more recalcitrant than others though it seems like the general practice initially is to treat all claimants—whether their own insureds or third-party claimants—as suspect and potentially fraudulent. Low-impact cases are treated as minimal or feigned injury, despite contradictory evidence of serious injury in these cases. Further, once a case has been placed in suit, insurers are content to wait until the day of trial to increase offers, instead of continuing to negotiate during the discovery period. The result of these practices is obvious: fewer cases will settle at reasonable amounts and more cases will have to be put in suit and subjected to substantial delay.
The bad faith claim against an insurer can only proceed if there is a plaintiff’s verdict or award at trial. After that happens, in most cases, the judge will review the insurer’s file and the specific circumstances of the claims handling process in that case. A chapter 176D violation can be found where liability was reasonably clear and the insurer refused to make more than a token offer, far below what would be fair and reasonable. Depending on the egregiousness of the insurer’s conduct, the judge in his discretion can order an award of attorney’s fees along with double or even treble damages. Because chapter 176D claims can cost insurers a lot of money, the statute deters some but definitely not all bad faith settlement practices.
VI. Government Owned Vehicles.
Motor vehicle accident cases from time to time involve vehicles owned and operated by a governmental entity like the state highway department or a local public works or police department. There are also thousands of vehicles owned and operated by quasi-governmental entities like the MBTA.
The negligent operation of a government vehicle is subject to a very specialized set of legal protections and immunities. The rules make it harder to successfully sue the Commonwealth or its municipalities, and if even if one is able to do this there is a cap of $100,000 on any recovery no matter how severe the injuries. Quasi-governmental agencies like the MBTA may or may not share these protections depending on a variety of factors. There are many pitfalls and intricacies in this area of law that require great care in navigating.
VII. Alcohol Related Accidents.
Auto accidents in which someone is injured by an intoxicated motorist gives rise to two different types of potential claims. The first type is a direct negligence claim against the intoxicated operator through that person’s auto insurance policy. It should go without saying that the operation of a motor vehicle while intoxicated is almost always deemed negligent. Evidence of such negligence can be established by the fact of a criminal conviction for violation of the state’s OUI or DWI regulations. Other types of evidence, even in the absence of a conviction, include a motorist’s high blood-alcohol levels, his failure of a field sobriety test, his verbal statements or physical demeanor at the accident scene, recent receipts for the purchase of alcohol and/or open containers of alcohol in the vehicle.
The second type is a claim against the alcohol server for causing the at fault motorist’s intoxication. These claims generally assert that the alcohol server was either negligent or reckless in serving a patron who later operated a motor vehicle and injured someone else or himself. The legal standards for these types of claims are different depending on whether the server is a licensed “dram shop” like a bar or a social host, whether the person served was a minor and whether the person served injured themselves in an auto accident or some third party on the roadway.
VIII. Accident Reconstruction.
Accident reconstruction is the determination of the most probable scenario for how an accident occurred. A reconstruction is a science-based analysis of the physical evidence from a motor vehicle accident such as the location and extent of vehicle impact damage, the length and direction of skid marks and damage to any fixed objects like signs, trees or guardrails. A reconstruction will also account for the prevailing weather, traffic and lighting conditions at the time of the accident. The physical evidence is then correlated with and compared to any witness statements in order to determine the most likely chain of events.
Accident reconstruction is different from the accident investigation done by the responding police officer at the accident scene. The police officer’s primary functions are to act as an emergency responder, to secure the roadway, to gather basic data about the vehicles and operators involved, to identify and question witnesses and to investigate whether a vehicular crime was committed or a driving regulation violation. The majority of police officers are trained to do police work, not accident reconstruction. An accident reconstructionist is a specially trained forensic investigator. Accident reconstruction requires expert education, training and experience in physical science, materials analysis, engineering and impact analysis.
Most state police forces and some large city police departments maintain their own dedicated accident reconstruction team. These are more like scientists than state troopers or police officers. Police-based reconstructionists are usually called in to investigate major highway accidents and fatalities, especially where the cause of the accident is unclear or disputed. The major purpose of their work is to determine criminal responsibility or whether any driving regulations were violated. Once completed, the police reconstruction analysis will be drafted in an official, signed report.
Private accident reconstructionists are also available for hire to conduct an independent investigation on behalf of an interested party. This usually happens in the context of a civil case brought by an accident victim where the cause of the accident is in dispute and either there was no police-based reconstruction or there was but it was flawed. The cost of private reconstruction services can be substantial. The civil litigant must weigh the high cost against the benefits such as the amount likely to be awarded in the case or the amount of the insurance policy or policies in play.
It should be remembered that most motor vehicle accidents do not require reconstruction because the cause of the accident is not materially disputed. This is the case in almost all rear-end collisions, right of way and speeding accidents.
IX. MASSACHUSETTS STANDARD AUTO INSURANCE POLICY.
Automobile insurance is heavily regulated in Massachusetts. Insurance here is compulsory: to register a motor vehicle in this state, one must purchase basic minimum insurance for it. The insurance policy is issued in a standardized written form approved by the state Commissioner of Insurance. The form policy is now in its seventh edition and is called the Seventh Edition Standard Auto Insurance Policy.
When a motor vehicle is insured, the insurance company issues an insurance policy to the insured person as the registered owner of the vehicle. The policy may also cover additional insureds who are specifically listed because they regularly use the vehicle as well such as spouses or children. An insurance policy is a contract between the insurer and the insured. It defines the rights and obligations of the respective parties when there is a motor vehicle accident. It also defines the benefits available to third-parties injured by the vehicle who assert claims against the policy.
Each policy includes a “coverage selection page” that lists the twelve different kinds of insurance, some compulsory and some optional, along with the amounts of coverage afforded for each under the policy. Here is a sample coverage selection page.
Parts 1–4 are compulsory. Everyone who registers a motor vehicle in Massachusetts must have these four minimal kinds of insurance:
Part 1: Bodily Injury (BI)
Part 2: Personal Injury Protection (also called PIP or “no fault”)
Part 3: Uninsured Motor Vehicle (UM)
Part 4: Property Damage (PD)
Parts 5–12 are optional coverages that can be elected at the time the policy is purchased or added at a later time. The election of optional coverage will increase the amount of one’s monthly insurance premium.
Part 5: Optional Bodily Injury (OBI)
Part 6: Medical Payments (Med Pay)
Part 7: Collision
Part 8: Limited Collision
Part 9: Comprehensive (i.e., fire, theft and vandalism)
Part 10: Substitute Transportation (i.e., rental coverage)
Part 11: Towing and Labor
Part 12: Underinsured Motor Vehicle (UIM) coverage.
A. Compulsory Bodily Injury (BI).
Massachusetts has mandatory minimum BI coverage of $20,000 per person and $40,000 per accident. This is fault-based coverage, payable by the insurer of the negligent driver for physical harm, pain and suffering and special damages sustained by the victim or victims as a result of the insured’s negligence. Compulsory BI insurance is also for the benefit of those injured or killed as a result of the negligence of someone else driving the insured’s vehicle with their consent. For BI to apply, it does not matter who is driving the insured’s vehicle as long as they had permission to drive it. If there is no permission, or in the case of a stolen vehicle, then compulsory BI does not apply at all.
B. Personal Injury Protection (PIP).
Personal injury protection (PIP) coverage is for the benefit of the driver and certain other people who are injured in automobile accidents regardless of who causes the accident. PIP is a no-fault benefit. PIP provides for reimbursement payments of up to $8,000 for anyone injured in an auto accident, again regardless fault, for three specific kinds of out-of-pocket losses.
1. Medical expenses.
PIP pays for “reasonable” and “necessary” medical expenses that are incurred within two years of the accident. These include funeral expenses for someone who dies as a result of the accident.
2. Lost wages.
PIP pays 75 percent of lost wages for people who are working at the time of the accident and 75 percent of lost earning power for people who are not working at the time of the accident but would have been employable but for their injuries.
3. Replacement services.
PIP also pays for “replacement services” for the injured person. These are the reasonable expenses incurred in paying non-family members to perform the “ordinary and necessary services” that the injured person would have otherwise performed “for the benefit of himself and/or members of his household.”
4. Payment structure.
PIP coverage pays the first $2,000 in medical expenses of a person with health insurance. The person’s health insurance must pay medical expenses after the first $2,000. The remaining $6,000 in PIP can be used to pay medical expenses that are not covered by health insurance, such as copayments, deductibles, and treatment that is not covered by health insurance, as well as lost wages and replacement services.
5. Whose PIP pays?
Usually, PIP is paid by the insurer of the auto that the injured person was riding in at the time of the accident. If the injured person was a pedestrian, the PIP claim is usually made against the insurer of the auto that struck him.
6. PIP eligible.
Unless a deductible is elected, the following people are eligible for PIP:
(a) Anyone riding in the insured vehicle with the owner’s consent;
(b) Any pedestrian struck by the insured vehicle in Massachusetts;
(c) Anyone living in the insured driver’s household riding in another vehicle that does not have Massachusetts compulsory BI (if it did, PIP would come from the policy on that auto);
(d) Anyone living in the insured driver’s household who is struck by another vehicle that does not have Massachusetts compulsory BI (if it did, PIP would come from the policy on that auto);
(e) Any Massachusetts resident who is struck as a pedestrian by the insured vehicle outside of Massachusetts.
7. Deductibles and exclusions.
To reduce their monthly premiums, some people elect a deductible that limits the level of PIP coverage or even eliminates it entirely. This limited level of PIP coverage applies only to the insured and his household members. PIP cannot be limited or eliminated for a passenger who is not a household member or for a pedestrian. If a deductible is elected, the coverage selections page will show a figure in the “deductible” column. It could be $2,000 (in which case, PIP does not pay for the first $2,000 of medical bills), or it could be $8,000 (in which case, there is no PIP at all). If no such election is made, the word “none” appears under “deductible”
Absent this deductible, every person injured in an auto accident may receive up to a maximum of $8,000 under PIP. Subject to some specific rules about paying medical bills, this sum is not specifically allocated among the three different kinds of expenses: medical expenses, lost wages, and replacement services. Thus, theoretically, the whole $8,000 can be used for any one of these kinds of out-of-pocket losses, to the total exclusion of the other two kinds. The selection is customarily left to the injured person.
8. Coordination of benefits.
If the injured person does not have any policy of health insurance available, PIP is obligated to pay for all of the injured person’s medical expenses, up to the $8,000 limit (or whatever is left over after PIP has paid for wages or replacement services).
However, if the injured person does have health insurance, there is a “coordination of benefits” provision for paying medical expenses under PIP. Under this provision, the PIP insurer pays only the first $2,000 of medical expenses and the health insurer pays for all such expenses above the $2,000 level (in accordance with its insurance contract). If there are still unpaid medical expenses after the health insurer pays what it is supposed to, these unpaid medical expenses—including charges to the claimant for copayments and deductibles—may be submitted back to the PIP insurer for payment out of the remaining available PIP money.
Medicare and Medicaid/MassHealth are not considered health insurance plans that are subject to these coordination rules. The same goes for fully self-funded employee benefit plans under the Employee Retirement Income Security Act (ERISA). Therefore, a claimant whose health insurance is in one of these categories is treated for purposes of the coordination of benefits provision as if he or she does not have any health insurance, and PIP is obligated for all medical bills and expenses up to the $8,000 limit.
9. Lost wages.
If the claimant is employed at the time of the accident, PIP pays 75 percent of his or her average weekly wage over the fifty-two-week period preceding the date of the accident. This is so even if at the time of the accident, the claimant is working at a job paying much less than the one he or she had been working at earlier that year.
The PIP insurer must also pay for “diminution in earning power” if the claimant was not working when the accident happened. For example, if the claimant had been employed until just before the accident and was seeking employment when it happened, the insurer must pay 75 percent of his or her average weekly wage for the fifty-two-week period before the accident. If the employee has a wage continuation program such as a disability policy or an accrual of sick or vacation time, PIP will pay only the difference between 75 percent of the average weekly wage and what the employee receives from such a policy or program.
10. G.L. c. 90, § 34M.
Under G.L. c. 90, § 34M, a PIP insurer must pay medical bills within ten days of submission or give notice as to why it will not do so. If any bills remain unpaid for thirty days, any “unpaid party” may sue the PIP insurer directly (and recover costs and attorney fees if successful). The term “unpaid party” refers to an unpaid medical provider, not the actual PIP claimant.
The statute says that a tortfeasor is exempt from tort liability to the extent that the injured person is entitled to PIP. In practice, this means that to the extent PIP is paid, those damages which are recovered(able) under PIP are—after a jury or arbitration award—deducted from the amount of the award. This is so that the tortfeasor does not pay them twice because the PIP insurer is reimbursed by the tortfeasor’s insurer for its payments. However, if the plaintiff is not entitled to any PIP benefits, there is no exemption.
11. Insurer Investigations, Examinations, and EUOs.
An insurer is entitled to “reasonable proof” concerning the medical bills and may seek an independent medical examination (IME) before paying them or conduct some investigation into their reasonableness. An insurer also has a right—stated in the policy at page 32—to an examination under oath (EUO) of “any person seeking payment under any part” of the insurance policy. This right extends only to people who are making a claim against the policy itself, not against the policy’s insured, which means that the insurer does not have a right to an EUO of someone making a claim for BI benefits (a so-called third party claim), only to people seeking PIP, Med Pay, UM, or UIM benefits (so-called first party claims). The same is true with respect to an insurer’s right to an IME.
There are some finer point with respect to EUOs worth mentioning. First, a claimant’s willful and unexcused failure to appear for the EUO is a material breach of the insurance contract, for which the insurer may disclaim coverage without having to show that it was actually prejudiced by the claimant’s failure to appear. Second, where there are two or more claimants seeking benefits in the same accident, the insurer has the right to conduct its EUOs separately, i.e., to isolate the claimants and examine them one by one. Third, the right to an examination under oath has been held to include an obligation on the part of the person examined to produce documents that are pertinent to the claimed loss. Fourth, the insurer’s right to an EUO is not unlimited in time—it must be exercised “within a reasonable time” after the insurer is notified of the accident (that is the policy language), or the right to the EUO is forfeited, and what is a reasonable time depends on the facts of each case. It has been held that a thirteen-month delay, without any excuse for it, is too long.
12. Insurer’s denial of PIP benefits.
In practice, PIP insurers regularly deny paying medical bills under PIP for a variety of reasons based on an IME report that medical treatment is not (or no longer) necessary, based on an EUO, based on an internal investigation by the special investigative unit (SIU) for fraud, based on noncooperation of the claimant, the late filing of a PIP claim or the unexplained failure of the claimant to attend an IME or EUO.
Where the denial is based on an IME, the examination need not be performed by a medical practitioner licensed in the same specialty as the one who has been treating the claimant. Therefore, an orthopedic surgeon who does an IME can opine that continued chiropractic care is no longer necessary, and based on that, the PIP insurer can rightfully stop paying the chiropractor’s bills.
For a PIP insurer to deny a PIP claim because it was allegedly filed late, the insurer must show it was prejudiced by the late filing. However, any PIP claim that is filed more than two years after the accident is automatically late, and no prejudice need be proved.
13. PIP not available.
PIP is expressly forbidden for the following classes of people:
(a) anyone driving or riding as a passenger on a motorcycle, motorized bike, or moped;
(b) anyone who is entitled to workers’ compensation benefits for the same injuries;
(c) anyone who is under the influence of alcohol or drugs;
(d) anyone who is committing a felony;
(e) anyone who is evading arrest; or
(f) anyone intentionally causing injuries.
In addition, the Massachusetts Bay Transportation Authority is excluded from having to provide PIP benefits to its passengers who are injured in motor vehicle accidents involving MBTA motor vehicle and trolleys.
14. PIP set-off.
Regardless of how the medical bills are paid through PIP, if there is a liability recovery for bodily injury there will be a set-off for any PIP monies paid.
C. Uninsured Motor Vehicle (UM) Coverage.
Uninsured motor vehicle (UM) coverage is for the benefit of people who are injured or killed as a result of the negligence of the operator of an uninsured auto. This is an important protection because many people are injured in accidents with uninsured motorists despite Massachusetts laws requiring compulsory coverage.
1. UM scenarios.
There are several UM scenarios:
(a) The accident-causing auto is stolen;
(b) The accident-causing auto is a hit-and-run vehicle (see discussion below) or is otherwise unidentifiable; or
(c) The accident-causing auto lacks insurance. This can occur where the vehicle was simply never registered and insured or where the insurance lapsed and was canceled because of non-payment. This can also occur if the vehicle is from a noncompulsory state such as New Hampshire or Vermont.
2. ”Hit and run” vehicles.
It is not necessary that a “hit-and-run” vehicle makes physical contact with another vehicle. It is enough if it just causes the accident such as where an unidentified vehicle crossed over center of road and forces the claimant’s vehicle into a guardrail, without any contact between the vehicles. In addition, a “hit and run” vehicle does not have to “run” in the sense of fleeing the scene of an accident. It may be that the drivers of the two vehicles failed to exchange information at the scene or that the police misidentified the accident-causing vehicle or they were provided with false information.
3. UM coverage.
The claimant seeking UM coverage must either be the insured or someone using the insured’s vehicle with his consent.
Compulsory minimum limits of UM are identical to the BI minimum limits— $20,000/$40,000. This is an attempt to assure that there will be at least some uniform amount of minimal coverage for almost anyone injured in a motor vehicle accident in Massachusetts. Policyholders can elect to have higher UM limits just as they can pay more of a premium and opt for higher BI limits.
UM claims are brought against the insurer in arbitration only. Lawsuits are not permitted except to file a complaint under G.L. c. 251 to compel arbitration but this only happens when the parties cannot agree on an arbitrator. The arbitrator is an attorney or retired judge with expertise in the area. The arbitrator decides both liability and damages and the decision is generally not subject to appeal except for extreme situations.
4. No “stacking”.
Stacking of insurance policy benefits is prohibited by G.L. c. 175, § 113L(5). Stacking is where a claimant adds all available policies together to create a greater pool in order to satisfy his actual damages. Accordingly, people may recover UM benefits from one source only.
5. Who pays UM?
Determining which policy or auto pays UM is a very fact-specific question and there are many rules in play. The answer depends on whether the injured person is injured while occupying any auto or as a pedestrian, whether and which policy the injured person is a named insured on, whether the injured person is a “household member” of a named insured on any policy and which policy has higher limits.
6. Amounts recoverable.
After the arbitrator decides the value of the claim, that value is reduced by whatever the claimant has received (if anything) under PIP, under a worker’s compensation claim or in any third-party claim against a tortfeasor who caused the accident.
7. Prompt notice required.
There must be “prompt” notice of any potential claim for UM benefits, as well as notice to the police and insurance company within twenty-four hours of a hit-and-run accident. Unless such “prompt notice” is given, the claim for uninsured benefits may be denied if the insurer can prove that it was somehow prejudiced by a lack of prompt notice.
8. Statute of limitations.
The statute of limitations for filing a claim for UM benefits is six years because the claim is one of contract, not tort. The statute of limitations begins to run when the insurer violates the insurance contract by refusing to arbitrate the claim.
9. Worker’s compensation exclusivity provision.
An employee who is injured by the negligence of an uninsured motorist while on the job and riding in his employer’s work vehicle is not permitted to recover any UM benefits from that vehicle’s insurance policy because that would violate the exclusivity provision of the Worker’s Compensation Law, G.L. c. 152. In practice, however, responsible employers purchase specific insurance that provides special UM coverage to its employees.
D. Property Damage Coverage.
Property damage (PD) insurance covers the physical damage to someone else’s property (auto or otherwise) that was caused by the negligent operation of a motor vehicle. Coverage is provided when the auto is being driven the named insured or by someone with the insured’s consent.
The measure of damages is the fair market value of the damaged property. For damaged vehicles, coverage also includes the loss of use of the damaged vehicle along with towing, storage and rental of a substitute vehicle.
The mandatory minimum PD coverage required is $5,000, but most people carry higher limits as a matter of course because the minimum amount does not cover much of the cost of repair.
The foregoing coverages are all mandatory. You cannot purchase auto insurance without these. In constrast, the coverage areas discussed below are all optional. They can be purchased separately for an additional premium.
E. Optional Bodily Injury Coverage.
Many policyholders wisely opt to purchase more than the bare minimum BI coverage of $20,000/$40,000 to protect themselves from personal exposure to claims for more substantial injuries caused by their vehicles. Optional bodily injury (OBI) insurance covers people who are injured or killed in motor vehicle accidents by the insured vehicle, whether it is driven by the insured(s), their household members or someone driving with the insured’s consent. OBI coverage can vary but it is usually $50,000/$100,000 or $100,000/$250,000.
OBI does not operate as extra or added insurance to that which is available under compulsory BI. OBI replaces BI. Thus, if a policy has $20,000/ $40,000 of compulsory BI and $50,000/$100,000 of optional BI, the total coverage available under BI to pay for the injuries is $50,000/$100,000, not $70,000/$140,000 (the sum of the two amounts).
There are very complicated, fact-dependent rules that determine whether and how OBI pays out in a particular claim.
F. Medical Payments.
Medical payment insurance (Med Pay) covers the reasonable and necessary medical expenses incurred by anyone riding in the insured auto with consent at the time of the accident. Med Pay also covers the insured or his household members struck by an auto as a pedestrian or while riding in someone else’s auto with their consent at the time of the accident. Med Pay is an optional coverage that usually involves $5,000 of coverage. Some people opt for higher coverage and are willing to pay a slightly higher premium.
In certain circumstances, an injured person can stack Med Pay benefits from different policies. This is subject to the “regular use” exclusion.
Med Pay does not cover medical expenses incurred later than two years after the accident or those that were paid by PIP.
Med Pay is not available until PIP benefits are first exhausted. So, in a situation where there is private health insurance, PIP will cover the first $2,000 in medical bills, then the health insurance coverage pays, then PIP pays again until it is fully exhausted, and only then does Med Pay kick in. Where there is no health insurance, PIP will cover the first $8,000 in medical bills and Med Pay will then cover the rest up to its limit.
G. Collision Coverage.
Collision insurance pays for the physical damage to autos involved in collision with other autos. This coverage pays for damage to the insured auto regardless of who is operating it or who is at fault, so long as there was consent to operate it. This coverage also follows the insured person and his household members who are operating other vehicles with their owner’s consent, again regardless of who is at fault.
With respect to the latter scenario – operating other people’s autos – the other owner’s collision coverage pays up to its limits first, and then the driver’s insurer will pay for any remaining part of the loss that is not covered by the owner’s collision coverage.
There are two general exceptions to this.
If the damaged vehicle is a rental or replacement vehicle and the insured opted out of collision insurance coverage for it (by accepting the “CDW”—the collision damage waiver—at the time it was rented), there is no collision coverage available by the rental vehicle’s insurer at all. The driver’s own insurer (which would normally be second in line) becomes first in line and pays the entire claim.
There is also a “regular use” exclusion that excludes collision coverage when the other vehicle being operated is owned or regularly used by the insured or his household member.
H. Limited Collision Coverage.
Limited collision insurance is identical to regular collision insurance except the issue of fault is taken into account. Limited collision coverage applies only if (1) the insurer determines that the operator of the insured auto (or the auto being operated by the insured person or household member) was not more than 50 percent at fault; and (2) the owner of the at-fault auto can be identified.
The determination of fault as a percentage does not affect the pay-out as it does in comparative negligence situation in a BI claim that goes to court. Eve if the insurer decides that the operator of the vehicle was 50 percent at fault, the cash payment is not reduced by 50 percent; it is still 100 percent of the damage, or the actual cash value if the vehicle is a total loss.
There are four types of accidents where the operator of the insured vehicle is automatically presumed to be less than 50 percent at fault (and therefore entitled to limited collision coverage):
(1) the auto was legally parked when struck by another auto;
(2) the auto was struck in the rear by a moving auto traveling in the same direction;
(3) the operator of the other auto was convicted of moving violations (except if the operator of the insured auto was also convicted of a moving violation); or
(4) the driver of the insured auto wins a court case against the operator of the other auto.
I. Comprehensive Damage Coverage.
Comprehensive insurance covers the physical damage or loss of a motor vehicle in situations not involving a collision with another vehicle. Examples of such incidents are listed as “vandalism, fire and theft, missiles, falling objects, larceny, explosion, earthquake, windstorm, hail, water, flood, malicious mischief, riot or contact with a bird or animal.”
Coverage applies where the damage or loss is to the insured auto or to an auto being used by the insured person or his household member with the consent of the owner.
If the damaged vehicle is a rental or replacement vehicle and the insured opted out of collision insurance coverage for it (by accepting the “CDW”—the collision damage waiver—at the time it was rented), there is no comprehensive coverage available under the rental vehicle’s insurer at all. The driver’s own insurer (which would normally be second in line) becomes first in line and pays the entire claim.
There is also a “regular use” exclusion that excludes comprehensive coverage when the other vehicle being operated is owned or regularly used by the insured or his household member.
J. Substitute Transportation.
Substitute transportation insurance provides reimbursement for renting a substitute vehicle if the insured auto is involved in a collision or if there was damage or a loss that is covered by comprehensive insurance and the auto is being repaired or replaced. Rental reimbursement will only cover a reasonable period of time for repairs or replacement of the damaged vehicle to be accomplished.
K. Towing and Labor Coverage.
Towing and labor coverage pays up to the amount shown in the coverage selections page for towing and labor costs each time an insured auto is disabled. This does not cover repair costs.
L. Underinsured Motor Vehicle Insurance.
Underinsured motor vehicle (UIM) coverage provides compensation for personal injuries and death where the accident was caused by someone other than the claimant and where that someone’s BI insurance is insufficient to satisfy the value of the claim. Much of the information regarding UM coverage discussed above applies equally to UIM coverage.
UIM coverage is available to the insured person, a household member and anyone riding in the insured person’s auto. If there are more than one policy or more than one auto on a policy that may apply to a situation, the rules for determining which policy or auto pays are the same as they are for UM.
UIM coverage only becomes available when the maximum limits of all available BI coverage is paid out. This is referred to as to the “trigger” for UIM claims. The trigger is the total amount of BI insurance that is available in a particular claim. That amount will be automatically deducted from the amount of UIM that may be available. The balance that is left after this deduction is the actual amount of UIM available for that claim. The limits of a tortfeasor’s personal excess/umbrella insurance policy, if any, are included in the trigger calculation to determine if UIM benefits are available to an injured claimant.
This trigger deduction often produces misleading results that leaves people wondering why they purchased UIM coverage. Here is an example. Claimant’s auto is struck head on by another auto which crossed the center line and is clearly at fault. The claimant and the owner of the other auto each have BI insurance of $20,000/$40,000, and the plaintiff has an optional UIM policy of $50,000/$100,000. Under this scenario, the claimant would have just $10,000 of UIM because the $40,000 in BI coverage is deducted from the $50,000 in UIM coverage. Thus, people who opt for $20,000 of UIM (as most unfortunately do) rarely receive any UIM benefit whatsoever.
In addition to the trigger deduction for BI insurance, the recovery of UIM benefits are also subject to deductions (1) for the amount, if anything, recovered from any legally responsible person, provided the injured person is fully compensated; (2) the amount, if anything, paid under worker’s compensation; and (3) anything paid under PIP.
Since there is no stacking of UIM benefits, there are case-specific rules for determining which insurance policy applies in much the same manner as for UM benefits. There are also very detailed rules governing when and how UIM benefits are available for multiple claimants in an accident.
Technically the UIM insurer must consent to the settlement of any underlying BI claim(s) as a prerequisite to bringing a UIM claim. However, the court cases on this have ruled that an insurer cannot unreasonably withhold it consent, and the insurer must prove prejudice if it intends to deny a UIM claim based on an alleged lack of consent to settle underlying BI case. In addition, the UIM insurer cannot withhold its consent to settle on the grounds that (1) the tortfeasor has personal assets that could satisfy the claimant above the BI policy limits, or (2) the claimant is willing to settle for less than the tortfeasor’s BI policy limits.
Even though a UIM insurer might consent to a settlement of the underlying BI claim, the UIM insurer can still contest the issue of liability at arbitration of the UIM claim.
X. Liens and Subrogation in Auto Claims.
A. Medical Liens.
Most auto accident claims are subject to a lien or subrogation right for reimbursement of medical expenses paid by someone other than the injured person. These reimbursement rights can arise when a hospital or doctor renders medical care that remains unpaid. They can also arise when a public or private health insurer pays for some or all of the injured person’s medical care.
Liens and subrogation both authorize a health insurer or a provider of health-care benefits to seek reimbursement from the proceeds of a settlement or judgment in personal injury litigation. A “lien” is a legal claim on monetary property that acts as security for payment of a debt. “Subrogation” is a contractual right between the health insurer and the insured for repayment of medical expenses from a personal injury lawsuit.
1. Hospital liens.
Massachusetts G.L. c. 111, §§ 70A-70D permits a medical institution or hospital to assert a lien against the legal recovery for any injury for which the institution has provided medical care and for which it was not reimbursed. To be valid and enforceable, the potential lien holder must send notice of the lien via certified mail to the injured person and others as set forth in the statute. The notice must contain detailed information as specified in the statute including the name and address of the insured person, the date of the accident, the name and address of the provider of medical services, and the name and address of the HMO, hospital, medical or dental service corporation asserting the lien.
A hospital’s statutory lien is valid only if the notice is received prior to a settlement, compromise, or judgment in the tort action. If funds are disbursed before any notice is sent, the lien is not valid or enforceable. The statute, however, is silent about the validity of a lien if the notice is sent after the case is settled, but before the funds are received or disbursed. The courts have not had an opportunity yet to address this issue, though plaintiffs would argue that a case is “settled” at the moment the terms are agreed to – not when funds are processed and disbursed.
A hospital lien must strictly comply with these notice requirements or else risk being deemed invalid by the courts.
The lien is placed on the net amount payable to the client from the total amount received from the tortfeasor. The net amount refers to the bottom line amount payable to the plaintiff after the deduction of attorney’s fee and expenses. A lien can never exceed the net sum received by the claimant after all deductions.
Valid liens that comply with the notice requirements have to be satisfied. Ignoring them never pays. It is always better to engage the lien holder early on in a case and get them to compromise as part of the settlement process. The attorney will contact the lien holder and explain the facts of the case and the risks of trial in attempt to get the lien reduced by agreement. Hospitals, HMOs and medical groups are usually more interested in recouping something rather than risk the possibility of getting nothing on their lien. This kind of willingness to compromise can greatly facilitate a settlement.
If a plaintiff ignores a hospital lien or refuses to pay it or wants to dispute it, the lien holder may sue to enforce it, but there is a one-year statute of limitations that begins to run from the time the settlement proceeds are paid to the plaintiff. Thus, a hospital lien dissolves one year after a payment to the plaintiff. In addition, section 70D provides that, if an individual sends a written request by certified mail to the hospital requesting an itemized statement of all charges and the hospital fails to provide such a statement within ten days, then the hospital’s lien automatically is dissolved. This applies to hospitals only.
2. Medicaid liens.
The Commonwealth of Massachusetts administers Medicaid assistance and benefits through the Executive Office for Health and Human Services (EOHHS). When payments are made to cover medical care for a beneficiary for injuries resulting from another party’s negligence, the agency automatically has a lien against any money recovered in any claim that is asserted as a result of that accident. This has been accomplished by statute in G.L. c. 18 §5G and G.L. c. 118E §22. Medicaid liens are “automatic” because there are virtually no notice requirements that need to be met in order for the lien to be valid.
When a Medicaid beneficiary applies for benefits, he or she is compelled by statute to complete an “Assignment” form that assigns whatever is recovered in a personal injury case to the Commonwealth of Massachusetts, all the way up to the amount owed. The form specifically states that if the medical assistance is needed due to an accident, such as a motor vehicle accident, the beneficiary must repay EOHHS for any benefits received. In practice, this “Assignment” functions as the notice for a potential lien to the beneficiary. Medicaid beneficiaries are also supposed to notify the EOHHS within ten days of the commencement of a civil action to establish liability of a third party. This rarely happens though because the requirement is contained in the fine print legalese of the Assignment form which may be filled out and presumably read years before a civil action for motor vehicle negligence is brought.
It is unclear whether the Commonwealth’s lien must be reduced to pay any part of the claimant’s attorney fees or out of pocket expenses. The statute is silent on the point and it has not been pressed in the court because in practice the EEOHHS is willing to reduce its lien. There are no set formulae for determining Medicaid lien reductions. They are determined on a case-by-case basis. This is done in recognition of the attorney’s work in recovering a monetary award (part of which will inure to the benefit of the Commonwealth). The EEOHS will also to try and reach an equitable result for the injured person.
3. Medicare liens.
Medicare is the federal health insurance program administered by the Centers for Medicaid and Medicare Services (CMS) for Social Security beneficiaries— either retirees or disabled workers. Medicare’s right to reimbursement is contained in 42 U.S.C. § 1395y(b)(2)(A), (B) (2000), and the regulations interpreting the statute are found at 42 C.F.R. §§ 411.20—411.54 (2000).
Medicare liens are automatic in much the same way as Medicaid liens. There are some differences though. With Medicare liens, the CMS formally agrees to share attorney fees and other costs, and also to reduce, on a pro rata basis, the amount it seeks to be reimbursed. The reduction percentage is the same percentage as the “procurement costs” in the case, meaning the percentage of the recovery going to the lawyer for his or her fees and costs.
4. Private health insurer liens.
Private health-care insurers receive subrogation rights to reimbursement from settlement proceeds as per the terms of the health insurance contract, which virtually no one ever reads. To assert a valid lien, there must be compliance with the statutory notice provisions which are the same as for a hospital lien. The insurer must send written notice by certified mail. The notice must contain certain information and be sent prior to any judgment, settlement or compromise. In addition, the insurer must provide a certified, itemized statement of all charges within ten days of receiving a written request or the lien will be dissolved.
And if a settlement is made without satisfying a valid lien, the injured party or his or heirs can be held liable. Such an action to enforce a lien must be commenced within one year after the date of such payment. Even if a lien is not asserted or is asserted but is lost, the claimant still may be liable for reimbursement under contractual subrogation requirements found in most health insurance contracts.
B. Worker’s Compensation Liens.
The issue of worker’s compensation arises when a person is injured in an auto accident while in the course of his or her employment, and liability for the injury rests with a third party motorist rather than with the employer. The employee would be entitled to worker’s compensation benefits under G.L. c. 152. And, the employee would have the right to file a third-party action against the negligent motorist that caused the accident.
However, if worker’s compensation benefits are paid, some or all of them will have to be reimbursed from a settlement or judgment in a third-party claim. The worker’s compensation insurer gets a statutory lien that automatically attaches to any third-party recovery. Under the statute, G.L. c. 152, § 15, any third-party settlement must receive court approval by submitting a petition for settlement to either the court where the third-party case is pending or to the Department of Industrial Accidents. Approval by the court may be sought when the case is already in suit or if settlement is reached at time of trial. The DIA may approve the petition whether the case is actually in suit or a suit has not yet commenced.
The worker’s compensation insurer is obligated to pay its proportionate share of the employee’s attorney fees and costs incurred in the third-party action.
A worker’s compensation insurer is generally willing to reduce its lien in order to facilitate settlement and thereby guarantee that it will recoup some of its expenditures on benefits for the employee. This frequently occurs where liability against the third party is questionable or where damages far exceed the available insurance coverage.
Another important consideration in resolving a worker’s compensation lien is the effect of such settlement on the employee’s future worker’s compensation benefits where there has been no lump-sum settlement to date. A worker’s compensation insurer is entitled to treat the statutory excess (the amount by which the third-party recovery for the injury, exclusive of interest and costs, exceeds the compensation paid under G.L. c. 152) as an offset against its obligation to pay future compensation benefits (minus the worker’s compensation insurer’s share of attorney fees and costs attributable to the third-party recovery) by paying a proportionate fraction of the employee’s claims subsequent to the third-party recovery as those claims arise until the total amount of claims equals the statutory excess. This is called a “Hunter offset” in honor of its origin in the 1987 case of Hunter v. Midwest Coast Transport, Inc. The practical effect of a Hunter offset is to reduces to one-third the weekly benefits received from the worker’s compensation carrier until the excess recovery is offset. The reduction also applies to medical expenses.
XI. What To Do After An Accident.
There are several “do’s” and “don’ts” if you are injured in a motor vehicle accident caused by someone else’s negligence.
• Do call the police and any necessary emergency medical service providers
• Do seek appropriate medical treatment in a timely manner and follow all reasonable instructions and recommendations from medical providers.
• Do photograph the automobiles involved in the accident, the scene of the accident, and/or any visual bodily injury.
• Do assemble all auto insurance policies, medical bills, police reports, and any other records concerning the accident.
• Do not talk to any insurance investigators or adjusters.
• Do not sign any documents that are mailed or delivered to you, except those from your attorney.
• Do not communicate with the at-fault driver as to how or why the accident happened and as to the nature or extent of your injuries (but you should cooperate with the necessary exchange of personal and insurance information).