Important!!!  Canadians Injured In The United States
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Auto Insurance in the United States: For Canadians Injured in the USA


Are Americans Insured like Canadian Drivers?


It is important for a Canadian injured in the United States, or by an American driver, to understand that the American insurance may not cover all the damages.  One major difference between car insurance in the United States and Canada are the minimum insurance requirements.  In the United States, the minimums are generally much lower than in Canada.  Furthermore, approximately 15% of American drivers have no insurance at all. 


It is rare for Americans to have the amount of insurance that most Canadians have.  That’s why one of the first things that a Canadian should do if involved in an accident in the US, or is injured by an American driver, is find out how much insurance the American driver has.  If a Canadian has a serious injury, the American driver may not be able to adequately compensate for the injury and loss.  A Canadian may be forced to pursue a claim against an American driver, if the American has assets against which to enforce the judgment.  Assuming the American driver does not have personal assets besides the insurance, a Canadian may be forced to pursue compensation under their own underinsured motorist insurance policy.


It is also important to understand “The Canada Non-Resident Inter-Province Motor Vehicle Liability Insurance Power of Attorney and Undertaking (PAU)”.  Generally, this document is filed by insurers in the United States who issue motor vehicle liability policies outside of Canada.
An insurer that files a PAU protects its insureds who drive their private passenger vehicles in Canada. Companies which have filed a PAU can issue a Canadian Non-resident Inter-provincial Motor Vehicle Liability Card (commonly known as a "yellow card" or "Canadian ID Card") to their insureds for driving into Canada. These insurance cards are used as evidence of insurance coverage if stopped by enforcement officials or involved in an accident in Canada. In addition, signatories to the PAU agree to certain conditions if an insured is involved in a motor vehicle accident in Canada. For example, the company agrees to meet the minimum third party liability limits required in the province or territory where the accident took place. (In most Canadian jurisdictions, the compulsory third party liability limit is C$200,000.)


Therefore, after a serious cross border accident, it is critical to get a lawyer who can help you get the compensation you deserve.  Despite the protections of the Canadian health insurance system, the possibility of underinsured motorist protection and the PAU, it is still possible that after a serious accident, the damages may be many times the minimum insurance. While we would prefer to obtain your compensation with insurance proceeds, if necessary and appropriate, we can conduct an asset search to try and ensure you are compensated.

 

Minimum Liability Coverage: Represented below in a series of three numbers separated by dashes that show the minimum liability coverage. The first number represents how much the insurance will pay for injuries per person, while the second number represents the total amount the insurance company will pay for injuries per accident regardless of how many people are injured. The last number is the maximum amount the insurance company will pay for damages per accident. All numbers are in the thousands of dollars so a coverage limit written as 25/50/10 means: $25,000 per person, max of $50,000 per accident in injuries, and a max of $10,000 in damages to property.


This chart is intended to illustrate how, after a serious cross border accident, the minimum insurance in the United States may not cover all the liability and property damage needs.

 

State   Minimum Liability   Underinsured Motorist Required?
Alabama   20/40/10   No
Alaska   50/100/25   No
Arizona   15/30/10   No
Arkansas   25/50/25   No
California   15/30/5   No
Colorado   25/50/15   No
Connecticut   20/40/10   Yes
Delaware   15/30/5   No
Florida   10/20/10   No
Georgia   25/50/25   No
Hawaii   20/40/10   No
Idaho   25/50/15   No
Illinois   20/40/15   Yes
Indiana   25/50/10   No
Iowa   20/40/15   No
Kansas   25/50/10   Yes
Kentucky   25/50/10   No
Louisiana   10/20/10   No
Maine   50/100/25   Yes
Maryland   20/40/15   Yes
Massachusetts   20/40/5   Yes
Michigan   20/40/10   No
Minnesota   30/60/10   Yes
Mississippi   10/20/5   No
Missouri   25/50/10   Yes
Montana   25/50/10   No
Nebraska   25/50/25   No
Nevada   15/30/10   No
New Hampshire   25/50/25   Yes
New Jersey   15/30/5   Yes
New Mexico   25/50/10   No
New York   25/50/10   Yes
North Carolina   30/60/25   No
North Dakota   25/50/25   Yes
Ohio   12.5/25/7.5   No
Oklahoma   10/20/10   No
Oregon   25/50/10   Yes
Pennsylvania   15/30/5   No
Rhode Island   25/50/25   Yes
South Carolina   15/30/10   Yes
South Dakota   25/50/25   Yes
Tenessee   25/50/10   No
Texas   20/40/15   No
Utah   25/50/15   No
Vermont   25/50/10   Yes
Virginia   25/50/20   Yes
Washington   25/50/10   No
Washington D.C.   25/50/10   Yes
West Virginia   20/40/10   Yes
Wisconsin   25/50/10   Yes
Wyoming   25/50/20   No


To make matters worse, despite the fact that automobile liability insurance is mandatory in America, approximately 16% of all American drivers are uninsured.  This ranges from approximately 28% of drivers in Mississippi to about 4.5% of drivers in  Massachusetts.  One popular spot for Canadians is Florida, where approximately 24% of all drivers have no insurance! 
 
For those American drivers with insurance, there are, in general, four categories of car insurance: No-fault, choice no-fault, tort liability and add-on. There are differences between these different types. The major differences include whether there are restrictions on the right to sue and whether the policyholder’s insurer pays first-party benefits, regardless of which driver was at fault for the motor vehicle accident.
In 12 states (as well as The District of Columbia and Puerto Rico), there is a no-fault car insurance scheme.


1. Florida,
2. Michigan,
3. New Jersey,
4. New York,
5. Pennsylvania,
6. Hawaii,
7. Kansas,
8. Kentucky,
9. Massachusetts,
10. Minnesota,
11. North Dakota,
12. Utah.
 
The Insurance Information Institute states the following about no-fault insurance:  The no-fault system is intended to lower the cost of auto insurance by taking small claims out of the courts. Each insurance company compensates its own policyholders (the first party) for the cost of minor injuries, regardless of who was at fault in the accident. (The second party is the insurance company and the third is the other party or parties hurt as a result of the accident.) This type of insurance is often misunderstood because the term itself implies a single insurance type.  In reality, it's not quite that simple.  "Pure" no-fault insurance describes car insurance that provides for no-fault payment of first party benefits and restricts the right to sue (what's referred to as the "limited tort" option).  The first party (policyholder) benefit coverage is known as personal injury protection (PIP).   Based on this definition, there are currently no states that have a pure no-fault system because all of them provide the ability to sue for non-economic or general damages (but only if and when those damages exceed a certain threshold).  Some variations of no-fault insurance relate to the threshold required to trigger the ability to sue, said threshold measured either in "monetary" terms (this applies to Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota and Utah) or "verbal" terms.  This applies in Florida, Michigan, New Jersey, New York and Pennsylvania.  This means you can file a liability claim if you are at least relatively seriously hurt. The criteria of seriousness can be expressed in terms of a written description (e.g. permanent disfigurement, scarring, or fractured bones) or expressed in terms of length of disability (e.g. disability for more than 60 days).  Injuries that qualify as serious are defined by each state’s law.

  
Kentucky, New Jersey and Pennsylvania are "Choice" states, meaning drivers can choose a no-fault system policy or a policy based on traditional tort liability law.  The tort policy used in "Choice" states are the same as those used in states without no-fault laws and, therefore, the claims procedures are the same.   A driver retains the right to sue, generally without any significant statutory limitations. Kentucky's no-fault scheme uses a monetary threshold.  New Jersey and Pennsylvania, the no-fault insurance system uses a verbal threshold. 


To complicate matters, Arkansas, Delaware, D.C. and Maryland have “add-on” no-fault automobile insurance laws. Add on allows the driver to purchase personal injury protection as an optional coverage. The plan pays benefits to the injured without regard to who caused the accident, but the driver can sue (and be sued) for accident-related injuries and pain and suffering.


If all of this this seems complicated, it is.  It is another reason why, if you are involved in a serious cross border accident, you need an experienced personal injury attorney.  Whether you are a Canadian injured by an American driver or an American injured by a Canadian driver, your ability to be compensated will depend in part on the ability of your attorney to navigate the complexities of the various insurance schemes..  

 

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