Which Insurance Companies Do I Look to For My Car Accident?

In 1985, the Supreme Judicial Court decided Cardin v. Royal Insurance Co., 394 Mass. 350 (1985), an important case pertaining to auto insurance. In that case, the Court used a sentence that has stuck with me ever since reading the opinion: “Navigating the tortuous twists of automobile insurance law is at least as difficult as the uninitiated driver’s first foray into the streets of Boston.” This is an accurate statement because understanding and appreciating all of the nuances of automobile insurance law in Massachusetts is a very difficult task.

In a seemingly straightforward car accident scenario, many different automobile insurers can be implicated. For example, if a client is a passenger in a friend’s car and that car is struck by another vehicle, there can be three or four different insurance companies and policies involved.

The vehicle which the client was occupying will provide Personal Injury Protection benefits– P.I.P. benefits. These benefits will pay three quarters of the client’s lost wages and pay for the first $2,000 in medical treatment. After the $2,000 is exhausted, under our coordination of benefits law, auto insurance will pay only for medical bills that are not covered by health insurance. The limit for P.I.P. benefits is $8,000. Hopefully, the client has access to medical payments under Part 6 and those could be available from either the car in which the client is riding or from the client’s household vehicles or even both. Medical payments can be stacked unlike uninsurance or underinsurance, which was prohibited in the landmark legislation of 1988. See M.G.L. c. 175, 113L.

Assume in this two car accident, that the other car was stolen. This recently happened to my client, a passenger in the first car. The stolen vehicle is deemed to be uninsured. (Of course, an attorney would still attempt to notify the insurance company that covered that vehicle to ascertain that there is no coverage.) If there is a denial of coverage, then the attorney would look to cars in the client’s household to cover the client’s pain and suffering. This is bodily injury caused by an uninsured vehicle under Part 3. Many years ago, the car in which the person was riding would provide that coverage (in addition to household vehicles) but now you must necessarily look to cars in the client’s household for that coverage. Such cars are not even involved in the accident when a client is riding in a friend’s car. Nevertheless, since 1989, the first resort is to household vehicles for Part 3 (and Part 12) coverage. If none exists, then and only then, can the client get such coverage from the car in which the client is riding. There is no effect when seeking Part 3 (or Part 12 coverage) on one’s auto insurance premium so, happily, that need not be a concern.

What about if the car in which the client is riding contributed to the accident? Then the client will not only seek PIP benefits from that car but will also make a claim under Part 5, optional bodily injury to others, the coverage for guest occupants. As the above hypothetical suggests, potentially four automobile insurers could be involved: 1) the insurer for the car in which the client was riding (PIP and possibly optional bodily injury); 2) an insurer on the other vehicle in the two car collision, which vehicle in this fact situation may be deemed uninsured for various reasons; and 3 and 4) the insurers of the client’s own household vehicles to contribute on a pro rata basis for Part 3 coverage and, if available, for Part 6 coverage. As you can see, a straightforward accident has become a maze consisting of numerous insurance companies.