Massachusetts is a mandatory insurance state, and as a result, all residents of Massachusetts are required by law to carry automobile insurance. New Hampshire, on the other hand, does not require everyone to carry automobile insurance. Many people ask us what this means for them, and their potential injury claim.
First, Massachusetts policies have what is called “personal injury protection” (a/k/a “PIP”) coverage. This is a type of insurance that pays for medical bills incurred as a result of an auto accident. So, if you are injured and have a Massachusetts policy, then the personal injury protection will be the first to pay out for medical bills. Under Massachusetts rules, the first $2,000.00 of all related medical bills to the accident are paid by the auto insurance coverage through PIP. Once the $2,000.00 is reached, there is an important event that happens, and that is the case reaches the “tort threshold”. Essentially, if you have incurred over $2,000 in medical bills, or have suffered scarring or permanent disability, then you are then allowed to proceed with a personal injury action. If you do not meet this tort threshold, you are not allowed to proceed under Massachusetts law, and are confined to be reimbursed by the PIP coverage. Once the $2,000 in PIP coverage is reached, then it gets really confusing. At that time, the primary payer on related medical bills to the accident switches to the health insurance company. They will pay the first payment, and then PIP coverage will pay for any co-pays or uncovered expenses that health insurance does not pay for. This will cover the next $6,000 of the total of $8,000 covered by PIP. However, PIP does not just cover medical bills, it also covers lost wages. So, it is very common for PIP to pay wages the injured person missed as a result of their inability to physically work. Thus, PIP coverage provides almost immediate remuneration to injured persons without having to reach a global settlement on your case.
In New Hampshire, the insurance policies are markedly different. First, you will not typically find any PIP coverage that you would in Massachusetts. Instead, most New Hampshire policies have medical payment coverage that can be as little as $1,000, and as much as $10,000. This is commonly referred to as “med-pay”. It is very important that your attorney of choice understands med-pay coverage and how that affects your claim. Medical payment coverage is non-subrogable, which is a complex way of saying that any bill paid by the med-pay policy will not be required to be reimbursed through any settlement. This is different from your health insurance. If your health insurance carrier pays for medical bills from an accident, and then you settle your claim from the accident, then the health insurance carrier has a right to subrogate (i.e. be reimbursed in part) a portion of the payments they have made to those medical bills. Thus, it is very important that any attorney understands that med-pay coverage must be exhausted first in order to save clients a potentially substantial sum of money. Unfortunately, in New Hampshire, this is all the payments you will receive other than reimbursement for property damage. Insurance companies will generally not pay lost wages or non-med-pay covered medical bills without reaching a global settlement on the file. Thus, as you can see, there are pros and cons to both systems. The Massachusetts system is complex and involves multiple insurance companies and departments, while the New Hampshire system is broader and involves fewer insurance issues. Both have their benefits, and both have their drawbacks