When deciding on a car insurance policy, it is important to understand the two unique policy options.
The full tort and limited tort policies can be referred to as tort insurance. They’re especially crucial when one has suffered an auto collision accident.
Tort insurance is where insurance meets law to serve road users.
What Is Tort Insurance
Tort is a term that refers to an act that causes harm or injury to another person and results in legal consequences.
When motorists are involved in a crash, often a collision, the law charges the at-fault driver in the
tort system. The driver who is at-fault is responsible for the cost of harm or damages that the crash has caused to the victims. Insurers use contributory negligence and comparative laws to determine fault.
Tort insurance isn’t purchased. The law regulates how your insurance policy will handle your case should you be involved in a collision accident. Choosing limited tort vs. full tort will determine the extent to which you can sue the other driver for damages.
Insurers include your tort choice as a clause on your car insurance policy. This option only becomes relevant when you’ve had an injury after a collision accident.
Is Tort Insurance A Requirement In My State?
All states require each driver to have car insurance. It is a standard insurance procedure and a requirement of the law. States in the US are categorized as:
- Tort states
- No-fault states
This categorization is based on the type of tort insurance system that states use. This is because not all states use the tort insurance system. States that do not use the tort systems use the no-fault insurance system.
The Tort system is where the at-fault driver is responsible for all damage costs incurred during the accident. Often the accident has to involve a collision. You cannot sue for damages without a full determination of who is at fault.
The no-fault system is where a driver may be at fault, but the law doesn’t require the provider to pay out damage and injury claims. Usually, insurance requires drivers in no-fault states to purchase Personal Injury Protection (PIP) coverage for their medical treatment bills, lost wages, and other expenses. At-fault drivers can use their PIP to pay for the victims’ medical bills.
Full Tort vs.Limited Tort: What’s The Difference
Under Tort Insurance, the law must find someone to be at-fault and responsible for causing the collision. The tort law then holds the at-fault party responsible for the sustained damages.
Insurers then offer clients the opportunity to choose full tort or limited tort.
To qualify to choose between full tort or limited tort, insurers require drivers first to carry liability insurance. Having liability insurance will enable them to cover the injuries they cause to others if they’re involved in a collision and damages caused to other party’s property such as car, fence, house, etc.
Full Tort policies allow you to sue the at-fault driver for any damages caused during the accident, including non-monetary damages.
If you sue for full tort, you will receive compensation for all the damages related to the particular accident, regardless of severity, including:
- Medical expenses
- Damage to vehicle
- Lost wages
- Pain and suffering
While full tort will give higher compensation, the insurance premiums are also much more expensive.
Full tort and full coverage are not synonymous. If you choose full tort, you need to check your policy document to ensure it includes the term ‘full tort’ and not full coverage.
Limited Tort policy is ‘limited’ in the damages that the at-fault driver can cover in an accident.
Under Limited Tort, you can sue the other driver solely for actual monetary losses after the accident, including:
- Out-of-pocket medical costs
- Property damages
- Wage losses
- Other related expenditures
Limited tort restricts you from pursuing non-monetary claims such as pain and suffering and general expenses.
Additionally, Limited Tort policy only covers severe non-monetary damages, such as serious bodily injury, including, but not limited to:
- Serious impairment
- Permanent disfigurement
- Loss of limb
- If the injury prevents you from working again
However, these categories are limited to the at-fault driver who committed an intentional collision act that caused bodily injuries. In some cases, the court may rule on full tort for specific limited tort exceptions.
Limited tort is often less expensive than full tort.
What Is The Tort Threshold
First of all, if you’re in a tort state, insurance providers will require you to have liability insurance. This is to ensure that you will cover injuries or damages that you may cause to others or property when someone sues you for tort.
The tort law dictates that an individual must meet a given set of requirements to recover damages for pain, suffering, and mental anguish. Sometimes the threshold covers for the inconvenience in some types of collision accidents.
Tort threshold can also be called “No-Fault Threshold.” if you meet the tort threshold, insurers will say that you have a “threshold injury.”
One needs a threshold injury to qualify for pain and damages if the at-fault driver has a PIP insurance. PIP insurance covers a driver’s medical bills, regardless of fault.
The injuries that make up the tort threshold include:
- Permanent and significant loss of a key bodily function
- Permanent and significant disfigurement or scarring
- Permanent decapacitation
The tort threshold is to limit tort lawsuits, mainly when the injury is less severe.
Full Tort vs.Limited Tort: What Should I choose?
This is never an easy decision if you don’t understand these two terms. However, if you understand them, deciding between full tort and limited tort can be a simple personal decision.
Some factors can influence your choice of full tort or limited tort, including:
- Your state: Are you living in a tort state or a no-fault state?
- Your family: Full tort often covers the whole household. If you want to leave your household fully covered in case you’re fully incapacitated in an accident.
- Your monthly budget: Can you afford an extra dollar on more coverage such as PIP or medical payments coverage as required by some providers?
- Personal decisions: Will you sue someone for full tort?
You can talk to your insurance agent or provider representative to get a clear view of the right choice. Ensure that you carefully review your options and understand the specific elements of each policy before you choose.
If you’re in a tort state, you can choose between full tort and limited tort. However, full tort or limited tort, you need a quality insurance coverage that guarantees you protection when you are the victim or the at-fault driver. It is up to you to decide if you need and can buy extra coverage.