Basic Reparations Benefits

Basic reparations benefits are automobile insurance benefits that provide medical, economic and other loss coverage up to a predetermined limit. The terms basic reparations benefits (BRB), personal injury protection and no-fault insurance are often used interchangeably. This coverage is known as no-fault because it pays out claims regardless of who is at fault in the accident. It applies to injuries sustained by the driver as well as passengers in the vehicle, and sometimes also pedestrians.

Basic reparations benefits typically cover three types of costs: medical, income and essential services.

1. Medical: Medical expenses covered under basic reparations include the cost of visiting a doctor or hospital, as well as the cost of obtaining rehabilitation assistance. These costs are covered providing that they are considered necessary and reasonable.
2. Income: If a previously employed policyholder is unable to work because of injuries sustained during an automobile accident, the insurer will pay a portion of the insured’s income. The amount of payment is typically low.
3. Essential services: The policy will also provide funds to help an injured individual who cannot perform household or other tasks because of injury.

Basic reparations benefits coverage differs from medical payments coverage in that it covers more than just medical expenses. It is generally more expensive than traditional auto insurance.

In some states, basic reparations benefits are mandatory, while in other states it is available but optional. Drivers are typically required to purchase basic reparations coverage in states that have no-fault insurance laws. The state sets a minimum amount of coverage that must be purchased, and the insurer is required to pay the benefit regardless of who was at fault. Requiring the driver to purchase this type of coverage comes with a caveat: drivers may lose their right to sue the other driver for damages. The states that have made BRB coverage compulsory have done so largely with the goal of limiting the number of lawsuits filed against at-fault drivers.

In states that do not require drivers to purchase basis reparations coverage, injured drivers are able to seek compensation for injuries and damages from the negligent driver. For example, an injured driver may initiate a personal injury claim against the negligent driver. Because basic reparations coverage is considered optional, the injured party will have to successfully sue the negligent party in order to pay for medical expenses unless the driver has purchased BRB coverage.