Written By: Lawrence Flick
Beginning in the 1970’s a number of U.S. states adopted no-fault car insurance. Personal injury protection, also often called “PIP”, is a cornerstone of the no-fault system. Generally, PIP provides for the payment, up to a certain limit, of medical expenses incurred due to a car accident regardless of who was at fault for the crash. The policyholder and other individuals in their vehicle are usually covered. In some states, the policyholder’s medical expenses may covered even if they were injured in a car accident while in someone else’s vehicle or on foot.
PIP represents a departure and, in some ways an improvement, over the way the insurance and legal systems handle compensation for people injured in auto accidents. Ordinarily, in a car accident case, the injured person’s ability to recover compensation, including money to pay medical expenses, depends on a finding that someone (like another driver) was negligent or “at fault” for causing the crash. In some cases this process can take months or years. Ordinarily, until the negligence of the person responsible for causing the crash, the amount of damages sustained by the injured person is determined and the case settled or decided in court, there is no payment of compensation, including payment for medical expenses.
Under this system, the injured person may have incurred medical bills for treatment of injuries sustained in the car or truck accident which may go unpaid for years, they may be harassed by bill collectors and even sued for the unpaid medical expenses. PIP, by providing for payment of medical expenses within a brief period of time after they are incurred, without determining who is at fault for causing the crash or requiring resolution of the injured person’s personal injury claim, can help people injured in car accidents avoid the problems of unpaid medical bills, collection proceedings and other undesirable consequences.
PIP Varies by State
Generally, auto insurance is controlled by the laws and regulations of each state. So the legal basis for PIP and no-fault car insurance is usually found in the statutes and/or regulations of the states which have enacted it.
The specifics and requirements of PIP coverage vary by state and the policy purchased. In Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Puerto Rico, Utah and in some other states PIP coverage is mandatory. On the other hand, in South Dakota, Texas, Virginia, Washington and Wisconsin PIP is optional. In states where PIP is optional policyholders choosing not to purchase it may be required to sign a waiver indicating that they have decided not to carry it.
PIP coverage and limits vary from state to state in terms of the amount of coverage, what is covered. For example, Kansas law requires that, auto insurance policies provide a minimum of $4,500 per occupant in PIP coverage. More PIP coverage may be purchased for an additional premium.
In some states, personal injury protection may pay 100% of medical and related expenses resulting from a covered accident up to the policy limit. In other states, a portion of the expenses up to the policy limit may be covered. PIP may also provide coverage for lost income and other certain other losses caused by the accident. Generally, PIP does not cover property damage.
Using PIP Benefits
When a person injured in a car accident covered under PIP goes to a hospital emergency room, doctor’s office or other health care provider, it would be a good idea to furnish the medical provider with information about their personal injury protection benefits, including the insurance company’s name and contact information, the policy number, date of accident, and, if known, claim number. An authorization allowing the health care provider to release information to the PIP carrier may also be required. The health care provider can then directly bill the PIP carrier for medical expenses incurred to treat injury sustained in the car accident.
Notifying the car insurance company providing the PIP coverage immediately after the car accident is also highly recommended. This allows the insurance company to start the PIP claims process. Generally, the insurance company will send the person making the claim a PIP application seeking information about the claimant, accident, treatment, and other matters. Not properly cooperating with representatives of the insurance company providing the PIP coverage may be grounds for denial of PIP benefits.
PIP and Health Insurance
Personal injury protection and health insurance may often cover the same medical expenses. For example, if a person carrying health insurance was injured while a passenger in a car where PIP coverage was available for occupants, questions may arise regarding which insurance company is responsible to pay the medical expenses. In this case, the terms of the insurance policies and any state laws or regulations become very important. As an example, under Kansas law, generally, the PIP carrier would be expected to pay medical expenses up to the maximum amount available PIP coverage then additional medical expenses above this might be the responsibility of the health insurance company.
PIP Reimbursement or Subrogation
In some states, insurance company’s which pay PIP benefits may be entitled to be reimbursed or “subrogate” from the proceeds of any personal injury claim arising from the car accident which the person for whom PIP benefits were paid, may recover. In case of such a recovery, in some cases the insurance company is required to pay a proportionate share of the attorneys fees on the amount they recovered.