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Rejecting PIP tort limitations: know the risks, as well as your rights

October 6, 2016

When an individual becomes involved in an automobile accident, it is critical that he or she exchanges insurance information with the other drivers involved in the crash and follows up afterward to seek out the coverage to which he or she is entitled. Given the obvious importance of insurance as a financial resource, most people don’t need much encouragement on this point.

What folks may need more guidance and encouragement about is pursuing an insurance company which refuses to deal fairly with an insured, and which tries to cover up its failure to treat an insured or claimant fairly. This refusal is known as insurance bad faith, and it occurs when an insurance company breaches its duty of to deal fairly and in good faith with a claimant. There are a variety of ways an insurance company can breach this duty, and it is important for accident victims to be able to recognize the potential signs of bad faith so that they can seek help in dealing with it. 

Despite these limitations on tort rights, motorists in Kentucky do have the right to reject these limitations, as well as to reject no-fault coverage in general. This is done by filing special forms with the Kentucky Department of Insurance. Those who choose to formally reject no-fault insurance are not entitled to receive basic personal injury protection benefits, though they may “buy it back” if they so choose.

It should keep kept in mind that, for those who reject personal injury protection or limitations on their tort rights, liability premiums are likely to be higher, and this can become costly. Obviously, rejecting no-fault insurance coverage and/or tort right limitations is a gamble, and each motorist has to determine for himself or herself whether it is worth it. Whatever form of insurance coverage a motorist has, though, he or she has the right to receive compensation as provided under his or her policy.

Motorists who face challenges receiving full insurance coverage can and should work with an experienced advocate to protect their contractual rights. This is particularly important when the insurance provider is dealing unfairly with the insured.