Question

Risk Management

1- Describe the benefits that are paid under a typical no-fault law ?

2- explain how the insurance right to recover ( subrogation ) works ?

Answer 1

1- Describe the benefits that are paid under a typical no-fault law

Ans: Below is a list of the benefits available under the No-Fault Act.

1. Work Loss. If any individual cannot work due to any injury or lose the job due to being disabled from work, the No-Fault insurer is obligated to pay wage loss benefits up to three years following the accident. The maximum amount per month the individual can receive is set by statute and amended each year. The current maximum wage loss benefit is $4989.00 per month.

2. Home Care (also referred to as “Attendant Care” services). If the injuries require the individual to get any help fdoing any personal care, the No-Fault insurer is obligated to pay a reasonable charge for the home care services, even if provided by your own family member. The amount to be paid varies and often depends on the level of care required and that is provided. Family members who provide care should not be reluctant to claim compensation from the No-Fault insurer.

3. Medical Expenses. The No-Fault law provides that “... all reasonable charges incurred for reasonably necessary products, services and accommodations for the injured person’s care, recovery or rehabilitation” should be paid by your No-Fault insurer. Generally speaking however, the medical expenses include doctor bills, hospital bills, medication costs, medical equipment and rehabilitation expenses.

4. Home Accommodations. Few homes are originally built barrier-free or handicap accessible. Thus, most homes require modification to meet your needs if you are catastrophically injured. Ramps, lifts, emergency exits, bathroom facilities, accessible kitchen and more may be needed. Should your injuries require special accommodation, the No-Fault insurer is obligated to pay for all reasonably necessary modifications.

5. Transportation. Medically necessary transportation cost is an expense that the No-Fault insurer is obligated to pay. May be an individual or a family member drive you to appointments or therapy in their own vehicle, a claim for medical mileage should be made to your No-Fault insurer. Although it is clear that the No-Fault insurer must pay for transportation, it is not clear how much they must pay. Most claims are paid anywhere from 14 to 54 cents per mile. If wheelchair accessible transportation is necessary, the No-Fault insurer is obligated to pay for such transportation. This may involve the purchase or rental of an accessible vehicle.

6. Household Replacement Services. Should your injuries disable you from doing household tasks that you would have otherwise performed, your No-Fault insurer is obligated to pay Replacement Service expenses. This benefit is available during the first 3 years after the date of the motor vehicle accident and is paid at a maximum of $20.00 per day. The usual household replacement services include house cleaning, snow removal, lawn / garden care, grocery shopping, pet care, and child care.
   Replacement Service benefits are completely separate from and is not to be confused with Home Care or Attendant Care services. Home care is for nursing, supervision or personal care of the injured person. Replacement Service is to pay for help that the injured person needs around their home doing chores that the injured person would normally have done for themselves.

7. Survivor’s Benefits. If a family member dies in a motor vehicle accident, No-Fault benefits can be paid to surviving dependents. These benefits consist of “contributions of tangible things of economic value” that dependents would have received for their support from the deceased had death not occurred. “Tangible things” under the law can include lost wages, medical insurance premiums and fringe benefits. The $20.00 per day Household Replacement Service benefit and a funeral expense can be owed in addition to the amount for “tangible things.”

2- Explain how the insurance right to recover ( subrogation ) works ?

Ans: Let's first understand what is subrogation--subrogation occurs when an insurer pays an insured for a loss caused by a third party. The insurance company is then “subrogated” or steps into the shoes of the insured to sue that third party for the loss suffered by the insured.This is done in order to recover the amount of the claim paid by the insurance carrier to the insured for the loss.

Now let's see how subrogation works:

Subrogation is generally the last part of the insurance claims process. In most cases, the insured person hears less about it. It's something which happens in between the insurance companies.

If any insurance company decide to pursue subrogation, the law states taht it should be informed that they are doing it.This is important for the customer and injured party, for two main reasons:

• If the insurance company decides to pursue subrogation to recover costs, they must try to recover the cost of your deductibleas part of the process, and refund it to you if they do recover it.
• Generally, the insurance policy will require to cooperate with any attempts by the insurer to pursue subrogation.
  • Among other things, this means you may not be allowed to sign any waivers or agreements that release the other driver from responsibility if he is judged to be at fault in the accident.

If the insurance company does not pursue subrogation, individual can still attempt to recover the deductible from the other driver or his insurer, but it become easier if the insurance company recover it for the individual.