Due Process Problems of Property Damage No-Fault Insurance

Michigan, Florida, and Massachusetts have recently enacted automobile property damage no-fault legislation. Similar to the concept of personal injury no-fault plans, the property damage legislation bars tort recovery for damage to vehicles involved in collisions and substitutes a system of insurance protection that would compensate the vehicle’s owner for these losses without regard to fault. There are, however, two essential differences between the property damage and personal injury proposals. First, because property damage claims have been minor as compared to those for personal injuries, the property damage proposals have permitted the vehicle owner to self-insure for the former losses by making his purchase of the no-fault insurance optional. Second, as compared to personal injury losses, property damage can be quickly, accurately, and objectively computed. These two distinctions between property damage and personal injury no-fault protection have caused the property damage plans to encounter constitutional difficulties which were avoided by the personal injury legislation. Generally, the constitutional attacks against both personal injury and property damage no-fault plans have been on two distinct grounds. The fundamental concept of no-fault protection, together with its consequent restrictions on tort recovery, has been challenged under the due process clause, while the equal protection clause has been used to attack individual elements of specific legislation. Since all presently enacted no-fault legislation contains various exceptions and so-called “threshold” loss determinations above which tort recovery is not restricted, the equal protection attack has had some limited success against such specific classifications of the personal injury legislation. Although the due process attack has not been successful against the personal injury legislation, it has fared somewhat better against the property damage no-fault plans.