The Benefits and Potential Risk of Making a PIP Claim

To obtain a full recovery from an accident, it is important to determine all of the applicable benefits to which the injured claimant is entitled. One such benefit is commonly called Personal Injury Protection (PIP), but can also be referred to as Medical Expense Benefits or Medical Payments (MedPay). These coverages, which are commonly referred to as PIP, are types of No-Fault insurance, meaning that they provide certain benefits to people injured in an accident regardless of who is at fault for the accident. It is possible for an injured person to obtain PIP benefits even if they were at fault and responsible for the accident.

Most PIP policies provide a certain amount of coverage – the most common amounts are $2,500, $5,000, and $10,000 – for medical bills and possibly lost wages, even if these bills or wages are paid by another source such as the other driver or your employer. PIP policies do not pay any amount for pain and suffering and work like health insurance – the insurance company reviews individual bills and claims for wages (submitted with the supporting medical records) and pays those that are proximately related to the accident and otherwise fair and reasonable.

One initial and extremely important issue that must be evaluated immediately is whether someone should make a claim for PIP benefits, even if they are available. In some jurisdictions, including the District of Columbia, a claimant must elect whether to make a claim for PIP benefits or to pursue a case against the negligent driver. The only exception is when the injuries are very severe, in which case it is legally permissible to do both. Thus, an attorney must evaluate the chance of success in proving a claim against an at-fault driver and the amount and nature of the client’s injuries to determine which claim to make, if the applicable law requires a client to choose one or the other. Other states, such as Maryland and Virginia, allow an injured person to make both a claim for PIP benefits and against the at-fault driver for compensatory damages.

Once it is determined that it is advisable to make a PIP claim, one must determine if there is PIP coverage. PIP generally covers the person named in the policy as the 'named insured', and residents of the named insured's household related by blood, marriage or adoption, step or foster children. Also, passengers and others driving the vehicle with the owner’s permission may also covered. In cases involving pedestrians, coverage depends on the applicable law. In Maryland, a pedestrian struck by a vehicle is entitled to make a claim for PIP benefits against the policy of the vehicle that struck him or her. In Virginia and the District of Columbia, there is no such coverage. Finally, some stores, homes and buildings have policies that also provide PIP coverage in the event someone is injured while on the premises – again, without regard to fault.

PIP claims must be made by deadlines in the applicable policy and can result in disputes with the insurance company if the company refuses to pay for a specific bill or to pay it in full. Likewise, an insurance company may refuse to pay an injured person’s lost wage claim, in part or in whole. In those instances, if negotiations do not result the dispute, an injured person can file suit against the insurance company providing PIP coverage and seek a judgment that they are entitled to payment.

In summary, PIP benefits are extremely important to being fully compensated after an accident. Moreover, the rules can be tricky and people can inadvertently lose their right to make a claim against an at fault driver by making a PIP claim if the law does not allow both claims. In addition, PIP claims can require negotiation with the insurance company to obtain full payment. For all these reasons, PIP is another reason to contact an attorney immediately after an accident – and before making any claims or signing any documents with an insurance company.