Navigating the Maze of North Dakota Motor Vehicle Insurance

SBAND – Young Lawyer’s Section
February 26, 2013
 No-fault (PIP)
 Uninsured (UM) & Underinsured (UIM)
 Collision/Comprehensive
 Other Coverages (Road service, etc)
 Policy may be broader than statute
No-Fault Insurance (PIP)
NDCC 26.1-41
Mandatory coverage
 Covers all accidents except
non-consensual use
uninsured vehicle
racing or speed contest
intentional acts
 Must arise out of maintenance, use or
operation of vehicle as a vehicle
 Covers vehicle occupants & pedestrians
Vehicle is primary coverage
No-Fault Benefits
$30,000 in total benefits available
 Medical expense
 Rehab expense
 Work/income loss @ 85% up to $150/wk
 Replacement service loss @ $15/day
 Survivor’s income loss
 Funeral expense @ $3500
Processing No-Fault Claims
Client must complete application
Client must submit documentation
Medical bills
Proof of wage loss
Disability statements
Benefits overdue if not paid w/in 30 days
Illusory coverage?
Coordination of benefits
benefits paid = 2 or 4 years
no benefits paid = 4 years after crash
Relationship to liability claim
No-fault provides a “sure & certain”
remedy (although partial remedy)
 Tradeoff is that clients give up right to
sue unless meet “serious injury”
threshold = $2500 in medicals,
permanent disability, death etc.
 Liability claim has setoff for no-fault
benefits paid
NDCC 26.1-41-02(1) & (2), 39-08-20(1), & 2916.1-11(2)(b)
Covers damages sustained to third party
because of “Fault” of insured
Policy “follows” the vehicle
ND: minimum limits $25,000/$50,000; also
property damage coverage
Who is an “insured”?
Named Insured
Members of Household
Permissive User
Employer Vehicle-employee driver
Umbrella or excess
e.g. permissive driver’s policy on
different vehicle
 Typical exclusions or limitations
non-permissive use
named driver exclusion
dropdown limits
Liability - Damages
NDCC 32-03.2-04; 32-03-20
 Property Damage
 Economic loss (wage loss, medical
expenses, etc. )
 Non-economic loss (pain, suffering,
inconvenience, physical impairment,
disfigurement, mental anguish,
emotional distress, etc.)
Uninsured Motorist (UM)
NDCC 26.1-40-15.2
Substitutes for no liability insurance
 Can’t use both liability & UM off of same
 Must establish tortfeasor is uninsured
 Phantom vehicle = physical contact or
independent witness
 Arbitration vs. litigation
Underinsured Motorist (UIM)
NDCC 26.1-40-15.3
When liability is not enough for damages
 “Difference in limits” vs. “add on”
ND “trigger = difference in limits
ND amount after trigger = add on
MN = add on
 Damages after liability amount
recovered & no-fault paid
UIM Pitfalls
Exhaustion- ND vs. MN
Who pays the gap?
 Priority of coverage
Vehicle first
“Extra” UIM (e.g. umbrella)
 30 day notice of liability settlement to
UIM insurer (substitution of check?)
Conflicts of Law
Which law governs?
Significant contacts test, with
Leflar’s 5 “choice-influencing factors”
 Out of state driver in ND crash
Policy issued & delivered out state
Carrier licensed in ND?
Carrier not licensed in ND
 Conformity Clause
 What about UM/UIM v. liability or PIP
If any questions, please feel free to
Mike Williams or
Duane Lillehaug
Maring Williams Law Office
[email protected]
[email protected]

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