How many times have you had a case where the plaintiff did not have insurance, but still wants to collect significant damages from your insured? This plaintiff, who should not have been driving in the first instance, has been involved in an accident with your insured and, irrespective of comparative fault, wants you, the insurance company, to pay complete compensatory and other damages. Seem outrageous? Well, it is, and the Indiana Legislature agrees.
Since July 2015, Indiana is now one of 11 states with a “No Pay, No Play” law that prohibits certain uninsured drivers from receiving financial compensation and other privileges for damages they incurred following an automobile accident. Essentially, this law keeps uninsured drivers who have a history of driving without insurance from recovering a wide range of damages from the other driver’s insurance company after an accident.
Generally speaking, a jury in automobile collision case is allowed to consider several different elements when awarding damages, provided evidence has been submitted to support the particular element requested. These elements include: (1) the nature and extent of the injury, and the effect of the injury on the plaintiff’s ability to function as a whole person; (2) whether the injury is temporary or permanent; (3) the physical pain and mental suffering the plaintiff has experienced and will experience in the future as a result of the injury; (4) the aggravation of a previous injury, disease or condition; (5) the disfigurement and/or deformity resulting from the injury; (6) the life expectancy of the plaintiff; (7) the value of lost earnings and the loss or impairment of earning capacity; and (8) the reasonable value of necessary medical care, treatment and services the plaintiff incurred and will incur in the future as a result of the injury. Indiana Model Civil Jury Instructions, No. 703.
Of these elements, only two (2) are actually economic in nature, i.e. lost wages/loss of earning capacity and medical expenses, requiring some form of calculation. The remaining six (6) elements are non-economic in nature and are simply based on a general idea of what living in pain is worth, the value of a permanent scar. These non-economic damages are often used by plaintiff’s attorneys to increase, sometimes significantly, the value of their client’s case.
In 2015, the Indiana Legislature decided that certain uninsured motorists should be limited in the amount of damages they were entitled to receive should they choose to file suit. Established to stop habitual rule-breakers, Indiana Code §§ 27-7-5.1 and 34-30-29.2 provide:
An insurer may not pay noneconomic damages on a claim for coverage under a motor vehicle insurance policy issued by the insurer if the claim is for coverage for a loss incurred by an uninsured motorist with a previous violation.
I.C. 27-7-5.1-5. In addition,
A person who:
(1) Sustained bodily injury or property damage as the result of a motor vehicle accident; and
(2) was an uninsured motorist with a previous violation at the time of the motor vehicle accident;
May not recover noneconomic damages for the person’s bodily injury or property damage from the owner or operator of another motor vehicle involved in the motor vehicle accident.
I.C. 34-30-29.2-3. As used in these chapters, noneconomic damages means:
(2) Physical impairment.
(3) Emotional distress.
(4) Mental anguish.
(5) Loss of enjoyment.
(6) Loss of companionship, services and consortium.
(7) Any other nonpecuniary loss proximately caused by a motor vehicle accident.
I.C. 27-7-5.1-3; 34-30-29.2-2. In other words, pursuant to these statutes, if an uninsured driver files a personal injury suit for injuries caused in a motor vehicle accident in which he/she did not have insurance and that uninsured driver was involved in another accident and did not have insurance or received a prior citation for driving without insurance, then they are prohibited from collecting noneconomic damages.
In other words, if a driver neglects to pay for car insurance and has a previous violation of avoiding this financial responsibility, they may end up paying big in other ways – even if they were not at fault for the accident.
Like all rules, there are exceptions to the “No Pay, No Play” rules. For instance, if the driver is under the age of 18, even if he/she has a previous uninsured violation, the Rules do not apply. In addition, the Rules do not apply when: (1) a person other than the driver incurs damages, i.e. the uninsured driver’s passengers; (2) when the tortfeasor (i.e. your insured) intentionally caused the accident; and (3) if the tortfeasor is convicted of a crime in connection with the accident, i.e. driving under the influence. If one of these exceptions apply, then the plaintiff, even if an uninsured driver with a prior violation, may collect all damages allowed under Indiana law.
In any event, it is worth exploring this possible defense in every automobile liability case. So how should your attorneys go about ascertaining whether the plaintiff was insured at the time of the accident, and whether they had a prior violation, thereby restricting the type of damages they are allowed to collect in litigation? First and foremost, the fact that a plaintiff has been identified as having insurance on a police report does not mean that they actually had insurance. We have all had cases where the information provided to investigating officers is incorrect or false. After all, if the plaintiff is willing to drive without insurance, especially if they have had a prior violation, it would not be surprising for them to provide false information when asked about having insurance.
In other words, we cannot simply rely on the police report to be able to make this determination. When our office receives a case, in addition to reviewing the police report, we do a full criminal and social media history regarding both the plaintiff and insured-defendant. Often, prior traffic violations and suspensions of driving privileges will be identified. A thorough review of the violation and suspension will reveal the reason, including failing to provide evidence of financial responsibility.
In addition, one of our standard Interrogatory questions involves whether the plaintiff was insured at the time of the accident. Not only does this question seek information regarding whether the plaintiff was driving with adequate insurance, but it can also provide information regarding underinsured motorist coverage that might be available. Knowing this latter information can often assist in discussions regarding settlement, as well as whether your insured could be facing a potential excess verdict. If the plaintiff admits that he/she did not have insurance at the time of the accident, further questioning with supplemental written discovery or during a deposition can help determine if there was a prior violation, such that the statutes outlined above would be applicable.
Lastly, if you suspect that the plaintiff did not have insurance, then it is very important to remember to plead, “No Pay/No Play” as an affirmative defense. If you do not have the necessary information when the first responsive pleading is due, then it is important to amend as soon as this information has been discovered, so as not to be precluded by the Court from making the necessary arguments at trial for failure to make a timely disclosure.
If you think that you might have a case involving the Indiana “No Pay, No Play” defense, feel free to call the attorneys at the Merrillville, Indiana office of Garan Lucow Miller, P.C. with any questions.
