Automobile No-Fault Endorsement

Summary: North Dakota law imposes on the owner of every motor vehicle required to be registered in the state, and on the owner of any motor vehicle operated in the state by its owner or with the owner's permission, the obligation of maintaining security on the vehicle as prescribed by the North Dakota Auto Accident Reparations Act. The following is a discussion of personal injury protection endorsement PP 05 83 11 11 and added personal injury protection endorsement PP 05 84 06 94, forms promulgated by Insurance Services Office to provide no-fault coverage as required by the North Dakota law.

Topics covered:

Who is insured

Exclusions

Benefits

No fault in relation to other benefits

Other items

Who Is Insured

No-fault benefits are payable to or for an insured who sustains bodily injury caused by an accident and arising out of the operation, maintenance, or use of a motor vehicle as a vehicle. “Insured” is a defined term that includes (1) the named insured and family members if injured while occupying any motor vehicle or as a pedestrian through being struck by any motor vehicle or motorcycle; and (2) anyone else injured as an occupant of the named insured's covered auto, as a pedestrian through being struck by the covered auto, or as an occupant of a vehicle not owned by, but operated by the named insured or a family member if the injury results from such operation by the named insured or family member. (Coverage for pedestrians in this second category is restricted to accidents that occur within the state.)

Exclusions

Exclusions in the endorsement restrict coverage with respect to the named insured and family members in three sets of circumstances. No coverage exists for the named insured with respect to injuries suffered while occupying an owned motor vehicle that is not a “covered auto” (defined on PP 05 83 as a motor vehicle with respect to which security is required under the law and to which the bodily injury liability coverage of the auto policy applies). Neither the named insured nor any family member is covered for injury while occupying or as a pedestrian through being struck by any motor vehicle, other than the named insured's covered auto or a motor vehicle being used in a ride-sharing arrangement, on which required no-fault coverage is in effect. (Coverage comes first from the no-fault insurance on the vehicle in which the injury occurs.) Family members are not covered for injuries suffered while occupying any motor vehicle they own on which no-fault coverage is not in effect. In other words, motor vehicle owners may not depend on policies in which they are insured only under the category as family members for no-fault coverage when they are in their own vehicles.

Injury arising out of the use of a motor vehicle while located for use as a residence or premises is not covered. The use of a motor vehicle in the course of a race or a speed contest (including practice or preparation) is similarly excluded by the policy.

Injury that arises out of “conduct in the course of” loading or unloading any motor vehicle is excluded, except when the injury occurs to a person occupying the vehicle. Injury arising out of “conduct in the course of” a motor vehicle repair, service, or maintenance business and occurring on the business premises is excluded with the exception of “actual operation” of a motor vehicle as a vehicle on the business premises.

Other exclusions rule out coverage for anyone injured while occupying any motor vehicle without the express or implied consent of the owner or “while not in lawful possession of any motor vehicle;” anyone intentionally causing injury to himself or herself, or attempting to cause injury to another; and injury due to war and nuclear hazards.

Benefits

North Dakota no-fault coverage pays benefits in seven categories as specified below, subject to a maximum limit of $30,000 for the total of all PIP benefits.

Medical expenses consist of the reasonable and customary charges for a semiprivate hospital room (unless intensive care is necessary). This benefit category pays reasonable charges for necessary medical and related services, including services for remedial treatment and care. The usual and customary charges paid for by PP 05 83 do not include charges sold without a prescription, charges for experimental treatments, or charges for medically unproven treatments.

Rehabilitation expenses are the cost of treatment for rehabilitation, including rehabilitative occupational training and is payable subject to the aggregate mentioned above. Treatment must be “reasonable and appropriate” in consideration of the disability being treated, its cost must be reasonable, and it must be “likely to contribute substantially to medical or occupational rehabilitation.”

Work loss is loss of income from work an insured would have performed had there been no injury, less any income from substitute work the injured person performs (or unreasonably fails to undertake). Recovery is limited to 85 percent of the computed loss and may not exceed $150 per week, prorated for periods that are less than a week.

Replacement services loss pays the expense incurred to obtain “ordinary and necessary” services from persons outside the insured's household to replace those the insured would have performed had there been no injury. The maximum amount payable for replacement services is $15 per day.

Survivors' income loss and survivors' replacement services loss are two more categories of benefits. Work loss and replacement services loss payments cease when the insured dies, but these two survivors' benefit categories continue paying for loss of economic support to the insured's dependent survivors and for replacement services after the insured's death. Survivors' income loss payments are limited to $150 per week (prorated) and survivors' replacement services loss to $15 per day.

Funeral expenses have a maximum amount payable of $3,500 and apply to reasonable expenses incurred for a professional funeral, cremation, and burial.

The personal injury protection aggregate limit and the internal limits applicable to work loss, survivors' income loss, replacement services loss, survivors' replacement services loss, and funeral expenses may be increased through the use of added personal injury protection endorsement PP 05 84. The amount of the additional aggregate, the per week additional work loss and survivors' income loss limits, the per day additional replacement services loss and survivors' replacement services loss limits, and the additional funeral expenses limit are entered in the endorsement schedule. Coverage under endorsement PP 05 84 applies only to the named insured and family members. It is subject to most of the exclusions governing the basic personal injury protection coverage, plus an exclusion of injury while occupying or as a pedestrian through being struck by a motor vehicle owned by the injured person but not insured for added personal injury protection under the policy. Benefits payable under the endorsement are considered excess over any available basic no-fault benefits as provided under North Dakota law.

No-Fault in Relation to Other Benefits

Duplicate recovery of no-fault benefits under more than one policy is prohibited. The maximum no-fault recovery for any one injury may not exceed the amount provided under the applicable policy with the highest dollar limit. Each contributing no-fault insurer is liable for a percentage of the loss prorated according to the proportion that its limit of liability bears to all applicable limits.

No-fault coverage is excess over any workers compensation benefits to which an insured is entitled. Uninsured motorists coverage under an auto policy with endorsement PP 05 83 attached is reduced by no-fault benefits paid or payable under any policy. Similarly, no-fault payments available from any source are made primary.

If the endorsement shows that coordination of medical expenses applies, the insurer will not provide personal injury protection coverage for medical expenses exceeding $10,000 to the extent that such expenses are paid or payable under any other insurance, benefit, or reimbursement plan. This provision does not apply to medical expenses that are paid or payable under Medicare or other personal injury protection benefits.

Other Items

“Motor vehicle” is defined on PP 05 83 to mean a vehicle that has more than three load-bearing wheels, is required to be registered under state law, is designed primarily for operation upon the public streets, and is driven by power other than muscular power. This definition also includes a trailer that is designed for use with such a defined vehicle.

“Pedestrian” means any person not occupying a motor vehicle or any other vehicle designed to be driven or drawn by power other than muscular power.

“Ride-sharing arrangement,” a term used throughout the endorsement, means the transportation of persons in a motor vehicle if that transportation is incidental to another purpose of the driver or owner and is not provided for a fee. This includes such arrangements known as carpools and vanpools as defined under North Dakota law.

“Survivor” means a dependent survivor of a deceased insured and includes the surviving spouse, if residing in the deceased's household at the time of death. The term includes other persons receiving support from the deceased at the time of death, which would qualify them as dependents for federal income tax purposes.

PP 05 83 also details the subrogation rights of the insurer and reimbursement procedures.