Not all states handle auto insurance the same way, which means motor vehicle subrogation across states is anything but standard. Massachusetts’s takes its own approach to how PIP subrogation pursuit is handled, and it directly affects the insurer’s right of subrogation, as well as right of from whom they have the right to recover.
In the following episode of On Subrogation: Massachusetts PIP Subrogation, Rathbone Group attorney Jason Sullivan breaks down the legalese of PIP subrogation in the Old Line State.
Massachusetts is a no-fault state, which means they require all auto insurance carriers to include PIP (Personal Injury Protection) coverage in their policies. PIP protection allows the injured party in an auto accident to recover losses like medical expenses and lost wages without first having to prove fault.
The framework for PIP policies and subrogation is set forth in Mass. Gen. Laws Ann. ch. 90 § 34M. Unfortunately, it is written in two massive paragraphs and is not as clear as other statutes that are nicely itemized. So below, we break down and itemize 34M for you:
MA PIP Subrogation Part I: Specifications
There are three major components of Massachusetts’ requirements for PIP coverage:
1. It requires that PIP carriers that issue policies provide their drivers with at least $8000 of PIP coverage.
- This reflects the no-fault theory by covering injured parties’ expenses with immediacy and without overloading the courts with insurance lawsuits.
2. It provides immunity from tort liability to any driver or owner that has appropriate PIP coverage in place, with conditions that protect the insured from lawsuits, which is an incentive for both the carrier and the customer to maintain PIP policies.
- It only applies to bodily injury claims only in cases where PIP coverage is in place.
- It does not apply if the resulting injuries meet a certain threshold like permanent disfigurement, extensive medical bills, and/or death.
3. It sets a two-year statute of limitations to make a first party PIP claim, meaning the injured party must file a PIP claim within two years of the incident or they waive their PIP coverage for that incident.
- Note that this requirement is for first-party claims. Statutes of limitations for the subrogation of PIP claims in Massachusetts will vary based on the type of claim. A subrogation team must be proactive about monitoring the claim and initiating a subrogation demand.
MA PIP Subrogation Part II: Rights of Subrogation
Section 34M then defines insurer’s right to pursue subrogation recovery when PIP coverage applies, both insured and uninsured motorist claims:
At-Fault Motorist without PIP Coverage
There are three frameworks 34M discusses where MA’s liability statutes in PIP subrogation are altered or excluded:
- If the at-fault motorist is not required to carry PIP coverage, such as the Transportation Authority, there is no protection from liability and they can be pursued via subrogation.
- If the at-fault motorist is uninsured and/or does not carry PIP coverage, they lose tort immunity, which allows pursuit of uninsured motorist subrogation.
- If the at-fault motorist is not a Massachusetts resident, an insurer retains their right to subrogation because they do not have the liability immunity MA PIP coverage provides.
At-Fault Motorist with PIP Coverage
The other set of exceptions and adjustments is when the at-fault motorist does carry PIP insurance. Because, while a carrier cannot pursue the motorist directly, they are still allowed to demand subrogation reimbursement from the motorist’s PIP carrier. Further, they are allowed to pursue the PIP claim as well as the costs of adjusting and pursuing the claim.
This can play out in different ways depending on the nature of the subrogation claim:
- MA insured + at-fault MA insured driver + MA accident = Subrogation of PIP costs and expenses from at-fault’s carrier
- MA insured + at-fault non-MA driver + MA accident = Pursue PIP subrogation costs directly from non-MA driver (does not include expenses)
- MA insured + non-MA accident + at-fault non-MA driver = Complicated
- If the state in which the accident occurred does not allow PIP subrogation recovery against tortfeasors but your insured’s policy provides a right of reimbursement if the insured settles with the tortfeasor, there may still be a right to reimbursement under a contractual framework.
Summarizing Massachusetts PIP Subrogation
Subrogation is complicated, but MA’s § 34M provides a framework that makes the possibility of subrogation clear at the outset of a PIP claim:
- The driver must maintain $8000 or more of PIP coverage.
- PIP coverage provides tort immunity, but only if properly maintained.
- Insureds have 2 years to file a PIP claim with their carrier, after which the coverage does not apply.
However, there is a lack of clarity when additional factors enter the equation. There are allowances for PIP subrogation under special circumstances, and conflict of law must be considered when out-of-state drivers and/or out-of-state accidents define the claim. PIP carriers should partner with a subrogation law firm of adjusters, lawyers, and specialists experienced in the specificities of different jurisdictions, because so many subrogation laws vary by state.
To learn more about topics in subrogation, including tips, strategies, and legislation, visit our Blog, YouTube channel, and podcast library. Have a question or topic we haven’t yet covered or want to learn more about the advantages of Rathbone Group’s subrogation services? Reach out at info@rathbonegroup.com.