MASSACHUSETTS AUTOMOBILE INSURANCE LAW
AS IT APPLIES TO
MASSACHUSETTS AND NEW HAMPSHIRE RESIDENTS
In Massachusetts there is only one standard, non-commercial automobile insurance policy. This policy must be approved by the Commissioner of Insurance. As a result, each Massachusetts resident is issued the same exact policy. To the extent possible, the coverages are explained in plain language within that policy. The first place to look when dealing with automobile insurance issues would be the standard policy.
Massachusetts automobile insurance liability law is a form of no-fault insurance. It was originally enacted in 1971. As stated in Flanagan v. Liberty Mutual Insurance Co., 383 Mass. 195, 198, 417 N.E.2d 1216, 1219 (1981):
No fault law was adopted to reduce the number of small motor vehicle tort cases being entered in the courts of the Commonwealth, to provide a prompt, inexpensive means of reimbursing claimants for out-of-pocket expenses, and to address the high cost of motor vehicle insurance in the Commonwealth.
Basically, the No Fault law established a threshold which claimants must reach in order to obtain pain and suffering damages. The most common threshold requirement is $2,000 in medical expenses. Prior to 1989, the amount was $500.00. The only logical explanation for that amount of money is that it was a compromise reached in the Legislature after intense lobbying of opposing forces. Massachusetts has long been a focal point for so-called “Tort Reform.”
Massachusetts General Laws, Ch. 231, §6D establishes a threshold which the injured party must meet before that party can obtain damages for pain and suffering. This applies to any accident within Massachusetts whether out-of-state drivers are involved or not. If you do not meet the threshold, you do not get pain and suffering damages. This applies to pedestrians and bicyclists as well as operators and passengers of motor vehicles. The threshold does not apply to collisions outside the Commonwealth. Furthermore, the threshold does not apply to Massachusetts operators and passengers on motorcycles.
To meet the threshold and be entitled to collect pain and suffering damages in a Massachusetts collision, you must meet one of the following criteria:
- In excess of $2,000.00 in reasonable and necessary expenses incurred in treating the injury, sickness or disease; or
- Permanent and serious disfigurement; or
- A fracture; or
- Loss in whole or part of a body member; or
- Loss of sight or hearing; or
In most cases the question is whether there is more than $2,000 in medical bills, scarring or a fracture. Theoretically a claimant could have a soft tissue injury which is permanent in nature, but if the claimant’s medical bills are $1,999.99, there would be no lawsuit for pain and suffering.
Because the $2,000 threshold is so important, concern arises as to whether the expenses are reasonable and necessary. In order to prove necessity, the plaintiff must show “that the [medical] treatment rendered by a competent medical doctor was a bona fide effort to alleviate and ameliorate the injury,” not that the treatment was an absolute necessity. Victum v. Martin, 367 Mass. 404, 407, 326 N.E.2d 12, 15 (1975); Pietroforte v. Yellow Cab of Somerville, Inc., 19 Mass. App. 961, 963, 473 N.E.2d 1148, 1150 (1985).
In Massachusetts, itemized medical bills subscribed and sworn to under the pains and penalties of perjury by the attending physician are admissible as evidence of the necessity, fairness and reasonableness of the charges. Mass. Gen. Laws. Ch. 233, §79G. Expert medical testimony is ordinarily not required to establish the necessity of medical services. The plaintiff’s own testimony may be taken into consideration along with the medical bills and reports. Scalia v. Liberty Mutual Insurance Co., 1995 Mass. App. Div. 69, 1995 WL 296772.
A New Hampshire resident injured in a Massachusetts crash is more fortunate. First, if the New Hampshire claimant meets the threshold, a claim can be maintained for pain and suffering in Massachusetts against the tortfeasor. If the threshold is not met, then the New Hampshire claimant has a claim against his/her insurance company. A New Hampshire resident injured in Massachusetts who does not meet the tort threshold is deemed to have been injured by an uninsured tortfeasor and therefore could pursue an uninsured claim. Green Mountain Insurance Co. v. George, 138 N.H. 10, 634 A.2d 1011 (1993).
Therefore, if your client is a New Hampshire resident, does not meet the threshold and has a policy of insurance, file a claim for uninsured coverage with that policy. If your client is a New Hampshire resident and has no insurance whatsoever, your client can still pursue damages other than pain and suffering as applicable. The reason for that is the tort threshold only applies to pain and suffering damages. Cyr v. Farias, 367 Mass. 720, 724, 327 N.E.2d 890, 893 (1975).
B. PERSONAL INJURY PROTECTION (PIP) AND MEDICAL PAYMENT COVERAGE (MED PAY)
In New Hampshire, a claimant often has Medical Payments coverage available to him from the car in which he/she was riding at the time of the injury. In Massachusetts, while many people still purchase Medical Payments coverage, the primary coverage for medical expenses is Personal Injury Protection (PIP). The statutes pertaining to Personal Injury Protection are Mass. Gen. Laws. Ch. 90, §34A which defines PIP in detail and Mass. Gen. Laws. Ch. 90, §34M which makes it a mandatory requirement in insurance policies and elaborates on its enforcement and coverage.
While a named insured can waive PIP coverage for himself and his household (but not for other occupants or pedestrians), it is a very rare event. Therefore, if there is a Massachusetts insurance policy, there will be PIP coverage available.
PIP provides coverage for the following benefits:
(a) Medical expenses (including eye glasses, prosthetic devices, funeral services and professional nursing);
(b) Seventy five (75%) percent of lost wages or lost earning power if unemployed; and,
(c) Payment to people for necessary services they rendered to the household which the injured party would have performed without pay (i.e. cleaning, etc.).
The expenses or losses must be incurred within two (2) years from the date of the collision.
2. Individuals Covered under PIP.
The following individuals are covered under PIP:
(a) Any person occupying the insured vehicle with consent;
(b) The insured or member of the household who is injured while occupying an automobile not having PIP coverage or if struck as a pedestrian by an automobile not having PIP coverage; and
(c) Any pedestrian struck by the insured automobile in Massachusetts or any Massachusetts resident struck by the insured automobile outside Massachusetts (New Hampshire pedestrians are not covered by PIP if struck in New Hampshire by a Massachusetts vehicle).
PIP does not cover motorcycles or their passengers and is not payable if workers’ compensation benefits are available to the claimant.
3. Amount of PIP Coverage Available.
PIP is available up to $8,000. However, if the claimant has health insurance, a different rule applies. In that situation, once $2,000 in medical expenses is paid by PIP, the claimant must submit the rest of the medical expenses to health insurance. Then, whatever health insurance will not pay is re-submitted to PIP. Health insurers are aware that by law they are not obligated to pay the first $2,000 in medical expenses. Therefore, they will automatically refuse coverage in an automobile situation.
4. Medical Payments Coverage.
Many people buy Medical Payments coverage (Med Pay) in addition to PIP coverage. It is seen in multiples of $5,000.
Med Pay covers anyone occupying the insured motor vehicle with consent. It also covers the insured and any household member if occupying someone else’s automobile or if struck as a pedestrian.
Med Pay coverage applies only to medical expenses and not to wages. Also, they must be incurred within two years of the collision.
In limited situations, Med Pay policies may be stacked. If the claimant is a pedestrian or riding in an automobile not owned by himself or a household member, then make sure to investigate whether the claimant and any household members have policies containing Med Pay.
5. PIP Reimbursement.
In a pure Massachusetts situation, whatever is received in PIP reduces the eventual personal injury recovery. If the case is tried to a judgment, the judge actually takes the verdict and reduces it by the amount of PIP paid. The PIP carrier is entitled to reimbursement from the defendant’s insurance company. Therefore, any offers to settle made by the defendant’s insurance company have already taken into consideration the fact that it must make PIP reimbursement.
The tortfeasor’s insurance company only has a duty to pay up to its policy limits, whether it reimburses the PIP carrier or pays the injured party. Therefore, if the tortfeasor’s insurance company pays the policy limits to the claimant, it is under no duty to reimburse the claimant’s insurance company for PIP.
The above point becomes important in a case which is valued close to the policy limit. For example, assume that PIP has paid $8,000 and the tortfeasor’s total policy is $20,000. Because the liability of the insurance company is only $20,000, the policy will be exhausted if the claimant is paid as little as $12,000, because the remaining $8,000 must go to PIP. Therefore, you have a powerful argument that the insurance company should pay you the policy limit because if it pays at least $12,000 to you it has to pay the entire policy anyway. By paying the $20,000 to you it ensures that it has settled the case and has protected its insured from potential excess liability.
In a situation where you represent a Massachusetts claimant against a New Hampshire defendant for an accident which occurred in New Hampshire, get the PIP payments first before filing suit. For out of state lawsuits, Mass. Gen. Laws. Ch. 90, §34M allows the PIP carrier to withhold payments once suit is filed. Then they are exempted from payment up to the amount that you obtain in a final judgment.
Pip reimbursement is somewhat unsettled when a New Hampshire insurance company (insuring the tortfeasor) is involved. A New Hampshire insurance company may be involved because its insured caused injury to a person covered under PIP and the injury occurred either in Massachusetts or New Hampshire. There is no statute authorizing a New Hampshire insurance company to withhold from a personal injury settlement that amount necessary to reimburse PIP benefits (Mass. Gen. Laws Ch. 90, §34M does require Massachusetts companies to do that).
The New Hampshire insurance company is more apt to insist that they must pay the PIP carrier back if the accident occurred in Massachusetts. If the collision occurred in New Hampshire, they are less likely to take that position. Mass. Gen. Laws Ch. 90, §34M gives a PIP carrier subrogation rights against any tortfeasor in a situation where the carrier has paid PIP benefits. Sometimes reimbursement does not occur when the collision happened in New Hampshire. Frequently the PIP carrier will contact the claimant to discuss PIP reimbursement and in that case the PIP carrier is usually willing to negotiate the amount.
6. Coordination of Benefits for PIP, Health Insurance and Medical Payments Coverage.
To maximize the ultimate recovery for your client, it is important to pay attention to coordination of benefits for PIP, health insurance and Med Pay. Remember that there is a dollar for dollar deduction from the eventual tort settlement for any PIP coverage paid. In addition, health insurance companies frequently will place a lien on the file, although often the lien can be negotiated. There is no reimbursement provision for Med Pay and therefore it is “free.”
Where there is PIP and health insurance but no Med Pay, PIP pays the first two thousand ($2,000.00) dollars in medical expenses. After that, the medical expenses must be submitted to the health insurance. Whatever the health insurance will not pay can be re-submitted to PIP (Medicaid and Medicare are not considered health insurance and therefore the full $8,000 in PIP would be applicable to medical expenses).
Where the plaintiff has health insurance, that plaintiff must take care in choosing medical providers. The first $2,000 in PIP coverage can be paid to any medical provider regardless of whether that provider is covered under the plaintiff’s health plan. However, for that amount over the first $2,000 in medical expenses, the plaintiff has a duty to seek treatment within his/her health plan. If the plaintiff is treated by a medical provider outside of the health plan, for treatment which the health plan would have covered had it been given a provider within the health plan, then not only will the health insurance not cover the treatment, but that amount cannot later be submitted under PIP. Dominguez v. Liberty Mutual Insurance Co., 429 Mass. 112, 706 N.E.2d 647 (1999). In summary, if you have PIP coverage and health insurance coverage but no Med Pay, be careful that after the first $2,000 in medical expenses, any other expense is covered within your health plan. If the health plan only covers a certain percentage, the remaining balance can be re-submitted to PIP.
Where there is PIP, health insurance, and Med Pay, it is important to pay close attention to who pays what. Because there is no offset from the personal injury settlement for Med Pay, you want to get at that as soon as possible. There is no deduction from the personal injury settlement for Med Pay whereas there is a dollar for dollar offset for PIP benefits.
When there is PIP coverage, health insurance and Medical Payment coverage, you first exhaust $2,000 in PIP for medical bills, and then submit the rest under your health insurance. If your health insurance only pays a percentage, submit the remaining balance to PIP. Medical Payment coverage will cover what PIP does not pay.
If you have Med Pay coverage you can use that to cover bills if you go outside your health plan. Therefore, if you decide for personal reasons to choose a doctor who is not within your health plan, and your health plan would normally provide a doctor in that same specialty, then you can still get reimbursed under Med Pay.
If there is PIP coverage and Med Pay coverage but no health insurance, then PIP must first be exhausted before Med Pay comes into play. However, remember that PIP may be exhausted not only by medical expenses but also by lost wages and other services. In general exhaust as much of the PIP coverage with wages and other services as possible. Steer as much of the medical expense toward health insurance and Med Pay as possible.
Experience has found that in the area of coordination of benefits, attention to detail is necessary. Unfortunately, this area of the practice is not lucrative and sometimes takes up an inordinate amount of time.
As a final point, attorneys cannot charge a contingent fee for obtaining PIP benefits for their clients. At best they can charge an administrative fee but many practitioners do not charge any fee at all.
7. Duty to Cooperate.
PIP benefits are contractual in nature. The policy requires the claimant to cooperate in terms of giving a statement as well as submitting to medical exams. The use of IME exams in PIP practice is standard. Non-cooperation is a defense, and insurance companies commonly refuse to pay once a claimant has missed two scheduled IME exams. Finally, even though the PIP carrier has an IME exam stating that no further treatment is necessary, you can still litigate the issue of further PIP payments.
8. Claimant’s Enforcement of PIP Rights.
Insurance companies have become aggressive in their attempts to limit PIP benefits. One method used by insurers is to obtain an early IME exam. In a soft tissue case the report may typically say that no further treatment is necessary. Based on that report the PIP carrier will shut off benefits.
Another way of cutting costs is for the insurance company to pay only a portion of the submitted medical expenses on the grounds that they are unreasonable. Remember, to be reimbursable under PIP coverage, the expenses must be both reasonable and necessary.
The test for whether medical bills are necessary for qualification under PIP is probably the same as that for qualification under the threshold requirements discussed earlier. The plaintiff must show only “that the [medical] treatment rendered by a competent medical doctor was a bona fide effort to alleviate and ameliorate injury,” not that the treatment was an absolute necessity. Victum v. Martin, 367 Mass. 404, 407, 326 N.E.2d 12, 15 (1975); Pietroforte v. Yellow Cab of Somerville, Inc., 19 Mass. App. 961, 963, 473 N.E.2d 1148, 1150 (1985).
The amount of money contested under PIP is usually not great. Nevertheless, it is a thorn in the side of practitioners because it affects the claimant’s eventual total recovery. If you find that a PIP carrier has denied benefits because of an IME exam, because the charges are not reasonable, or for any other reason, the best way to handle that is to begin with a 93A demand letter pursuant to Mass. Gen. Laws Ch. 93A, §9. Independent of Mass. Gen. Laws Ch. 93A, Mass. Gen. Laws. Ch. 90, §34M contains a provision for payment of attorney’s fees if you are successful in suing an insurance company for failure to pay PIP benefits.