Navigating the Maze of North Dakota Motor Vehicle Insurance

1. SBAND – Young Lawyer’s Section February 26, 2013 Navigating the Maze of North Dakota Motor Vehicle Insurance

2. Overview • Liability • No-fault (PIP) • Uninsured (UM) & Underinsured (UIM) • Collision/Comprehensive • Other Coverages (Road service, etc) • Policy may be broader than statute

3. 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

4. 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

5. 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? IME Coordination of benefits • Limitations benefits paid = 2 or 4 years no benefits paid = 4 years after crash

6. 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

7. Liability • NDCC 26.1-41-02(1) & (2), 39-08-20(1), & 29-16.1-11(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

8. Liability • Umbrella or excess e.g. permissive driver’s policy on different vehicle • Typical exclusions or limitations non-permissive use named driver exclusion dropdown limits

9. 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.)

10. Uninsured Motorist (UM)NDCC 26.1-40-15.2 • Substitutes for no liability insurance • Can’t use both liability & UM off of same vehicle • Must establish tortfeasor is uninsured • Phantom vehicle = physical contact or independent witness • Arbitration vs. litigation

11. 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

12. 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?)

13. 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

14. Questions? • If any questions, please feel free to contact: Mike Williams or Duane Lillehaug Maring Williams Law Office 800-492-5297 mwilliams@maringlaw.comdlillehaug@maringlaw.com