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What is limited-full tort?

Criminal Law vs. Civil Law

The best way to understand a limited tort policy is to step back for a better perspective. If you take the Law as a whole, it can be divided in half. On one side you have Criminal Law, which most individuals have a decent understanding. This is when a person commits a crime and the State or Federal Government prosecutes the case.

The other half of the Law is what is known as Civil Law. This involves one individual filing a lawsuit against another individual. Civil Law may be divided into many other categories, including Corporate Law (mergers and acquisitions), Domestic Law (divorce and custody), Contract Law (disputes between building contractors or providers of goods and services), and Tort Law.

What are torts?

Tort Law is that area of Civil Law that deals with personal Injuries. It includes medical injury cases, premise liability cases (slip and fall or dog bite), and automobile collisions.

In approximately 1990, our legislatures passed a law enabling insurance companies to sell a type of automobile insurance called, Limited Tort. The intent of the law was to contain what was perceived as the spiraling cost of automobile insurance.

In exchange for an approximate 20% reduction in premium cost, a person who selects Limited Tort coverage has waived their right to receive compensation for any Non Economic Losses. However, a person with a Limited Tort policy may still make a claim for, and collect, all their Economic Losses.

Economic Losses

  • lost wages
  • unpaid medical bills (co-pays)
  • collision damages.

Non Economic Losses

  • loss of life’s pleasures
  • disfigurement
  • any pain or suffering

Thus, if you sustain an injury in an automobile accident due to the negligence of another driver, and you have a Limited Tort insurance policy, you may be limited to make a claim only for your out-of-pocket expenses. This may also make it nearly impossible to find a lawyer to represent you on a contingency fee basis as it is unlikely that the lawyer will be able to earn a fee.

However, there are exceptions to Limited Tort. For instance, if you sustain a serious impairment of a bodily function, you may be deemed to “overthrow the Limited Tort threshold.” Generally, such an injury must be more than a simple whip lash injury, and usually involves the need for medical care over an extended period of time.