Steven A. Bagen | August 23, 2024 | Car Accidents
In most states in the U.S., someone who causes a car crash must cover any injuries and losses of others. However, 12 states have no-fault car accident systems, which require drivers to carry no-fault personal injury protection (PIP) coverage: Florida, Hawaii, Pennsylvania, Kansas, Michigan, Kentucky, Massachusetts, Minnesota, New York, New Jersey, North Dakota, and Utah.
PIP benefits should cover certain losses regardless of who is to blame for a crash. However, limitations to PIP claim coverage include possible offsets or penalties.
Anyone with injuries from an accident in a no-fault state should consult a car accident attorney, just like they should in a fault-based state. A lawyer can navigate the PIP process and address any complications that arise.
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OVERVIEW OF PIP COVERAGE
Personal injury protection insurance provides financial protection for medical expenses, lost income, and other related costs resulting from injuries sustained in a car accident, regardless of who was at fault. PIP insurance aims to provide swift and comprehensive coverage for accident-related injuries and reduce the need for lengthy and often contentious legal battles over fault.
Some key features of PIP insurance include:
- Medical expenses coverage – PIP covers a range of medical expenses, including hospital bills, doctor visits, surgical procedures, rehabilitation, prescription medications, and even some non-medical treatments such as chiropractic care and acupuncture. This coverage extends to the driver, passengers, and sometimes pedestrians involved in the accident.
- Lost income coverage – If injuries sustained in a car accident prevent the insured person from working, PIP insurance can cover a portion of their lost income. This ensures that individuals can still meet their financial obligations while recovering.
- Funeral expenses – In the unfortunate event of a fatal accident, PIP insurance can help cover funeral and burial expenses, providing financial support to the deceased’s family.
- Essential services – Some PIP policies cover essential services, such as childcare and household chores, that the injured party may require while recovering.
One of the main benefits of PIP insurance is its no-fault system. This means that regardless of who caused the accident, the policyholder’s own insurance company must cover some of their medical expenses and other eligible costs. This relieves the requirement of proving someone else’s negligence and liability to receive PIP benefits.
The PIP system aims to facilitate swift claims processing. Because this type of coverage doesn’t consider fault, PIP claims processing should move more efficiently, providing injured parties with the necessary support without prolonged legal disputes. Like other insurance, PIP coverage has limits and options.
First, the coverage limit determines the maximum amount the insurance company will pay for medical expenses and other costs. In some states, policyholders can choose different coverage levels based on their needs and budget. In other states like Florida, maximum PIP limits are only $10,000, which often does not cover all accident-related losses.
For example, current Florida personal injury protection law requires all motorists to maintain $10,000 in personal injury insurance coverage. However, a Florida PIP policy will only cover 80 percent of certain medical expenses related to a car accident and only if the policyholder receives care within 14 days of the crash. A PIP claim can also include payment for disability benefits, including 60 percent of lost income and certain death benefits if the crash resulted in a fatality. Again, this coverage applies regardless of who was to blame for the accident.
In addition to these PIP coverage restrictions, those involved in an accident should be aware of possible offsets and penalties that might also affect their benefits.
Possible PIP Offsets
PIP offsets happen when insurance companies subtract certain benefits received from other sources from the total amount payable by the insurance company. PIP offsets aim to prevent overcompensation for the same expenses and to ensure that the injured party does not receive more than the actual costs incurred due to the accident.
In PIP states, individuals commonly find multiple sources of coverage for accident-related expenses. For example, in addition to PIP coverage, a car accident victim might also recover payment from their health insurance, workers’ compensation, government programs like Medicaid or Medicare, or another responsible third party. When multiple sources of coverage exist, PIP offsets come into play to prevent double recovery.
The main types of PIP offsets include:
Health Insurance Offset
If an injured individual has health insurance that covers medical expenses resulting from an accident, the PIP insurer may offset the PIP benefits by the amount the health insurance company pays. This avoids duplication of coverage and ensures that the injured party doesn’t receive compensation for the same expenses twice.
Workers’ Compensation Offset
In cases where an individual suffers injuries while performing work duties, they might qualify for workers’ compensation benefits. If workers’ compensation also covers medical expenses, the workers’ compensation benefits can offset the PIP medical benefits to prevent overcompensation.
Medicare/Medicaid Offset
Government programs like Medicare and Medicaid can also provide coverage for medical expenses. If these programs cover an injured individual, PIP benefits might be offset by the amount paid by Medicare or Medicaid.
Disability Insurance Offset
If an individual has disability insurance that covers lost income resulting from an accident, the PIP insurer might offset the PIP benefits by the amount received from the disability insurance policy.
Third-Party Claims
When a PIP insurer pays the policyholder’s medical expenses, it cannot claim a lien against those expenses. As a result, if the injured policyholder successfully brings a third-party claim against another driver (learn more about third-party actions below), the PIP company is not reimbursed for the payments made under the PIP claim. However, a third party who is found responsible for the crash can claim a setoff for the amount paid by the PIP insurance company.
What if the injured claimant doesn’t have PIP coverage?
Some drivers don’t carry the PIP coverage required by law. If another driver was responsible for the accident, do they still receive an offset for payments the PIP coverage would have paid if the injured person had obtained the mandatory coverage?
Florida courts are divided on this issue. Some appellate rulings, namely the Cases v. Gray decision and the Holt v. King case, allow a liable third party to take an offset for the benefits PIP would have paid. However, other district courts of appeal have held differently, specifically in Jedlicka v. Proctor and Stephens v. Renard. This is a complicated area of law and injured claimants should talk to an experienced car accident attorney to fully understand the value of the compensation they may receive.
The specifics of PIP offsets can vary according to state laws and insurance policy terms. Insurance companies must clearly outline any offsets in their policy documents, ensuring transparency and allowing policyholders to understand possible limitations of their benefits. However, PIP policies are complicated and confusing. A skilled injury attorney can help explain the terms of your specific coverage.
Understanding PIP offsets will help you navigate the complexities of insurance claims after an accident. If you need to file a PIP claim and have other potential sources of payment for your injuries, it’s important to discuss potential offsets with a dedicated car accident attorney. A tenacious personal injury lawyer will know how to recover the maximum compensation possible from all sources.
Possible PIP Penalties
In certain circumstances, claimants might face penalties related to their PIP coverage. These penalties prevent abuse of the insurance system and ensure that claimants use PIP benefits appropriately. Some of the most common PIP penalties include:
Fraudulent Claims
One of the most significant PIP penalties involves making fraudulent claims. Attempting to defraud the insurance company by exaggerating injuries, submitting false medical bills, or providing misleading information can have serious consequences. These penalties can include denial of claims, cancellation of coverage, legal action, and even criminal charges.
Claimants must ensure the insurance company does not wrongfully accuse them of fraud. Partnering with experienced legal representation can help prove your claim is legitimate.
Exceeding Coverage Limits
Each PIP insurance policy has coverage limits that specify the maximum amount the insurer will pay for medical expenses and related costs. If an individual’s expenses exceed these limits, they might need to pay for the remaining costs out of pocket or find another financial source. Victims should understand their coverage limits and not rely solely on PIP if medical expenses are substantial.
Late Reporting
Failing to promptly report an accident to the insurance company can lead to penalties. Insurance companies typically require timely notification to initiate the claims process efficiently. Delays in reporting can result in delayed benefits and potential complications in processing claims. Have your attorney notify a PIP insurer of any accident, injuries, and pending claims as soon as possible.
Failure to Cooperate
Insurers require policyholders to cooperate fully in the claims investigation process. This includes providing accurate information, medical records, and documentation to support the claim. An injured claimant may also be requested to attend an independent medical examination or provide an examination under oath.
Failure to cooperate can result in delayed benefits or even a claim denial. Work with a lawyer who can help you handle all requests by a PIP insurer.
Non-Emergency Use
Some states require that PIP benefits only cover emergency medical treatment from the accident. Using PIP benefits for non-emergency medical care not directly stemming from the accident might result in the insurer refusing to cover those expenses. Other states, like Florida, only allow $2,500 for non-emergency use, while emergency injuries might receive up to $10,000 in coverage.
Disallowed Treatments
Insurance companies typically have guidelines regarding the types of treatments and services eligible for coverage under PIP. If a policyholder seeks treatments or therapies that fall outside these guidelines, the insurance company might deny coverage for those expenses. Always ensure treatment qualifies for coverage before undergoing it.
Misrepresentation of Facts
Providing inaccurate or false information when applying for PIP coverage can lead to penalties. Misrepresenting facts about driving history, medical conditions, or other relevant information can result in coverage being denied or revoked.
Policy Violations
Policyholders must also adhere to the terms and conditions of their PIP insurance policy. Violating policy terms, such as using a vehicle for commercial purposes when the policy covers only personal use, can lead to penalties or even cancellation of coverage.
Not Seeking Medical Attention
If an individual fails to seek timely medical attention after an accident, the insurer might reduce or deny your benefits. Insurance companies often require an injury victim to obtain medical attention within a specific timeframe to qualify for coverage.
While PIP insurance provides valuable coverage for accident-related expenses, policyholders must adhere to the terms of their policy and use benefits appropriately. Understanding your policy, promptly reporting accidents with help from an attorney, and cooperating with the claims process are essential to avoiding PIP penalties and ensuring you receive the benefits you deserve.
If a PIP insurer denies an accident claim, all unpaid medical bills are considered “not payable” for purposes of a financial offset as described above. The Florida landmark case of Rollins v. Pizzarrelli specifically explained that where PIP coverage is denied, or the PIP insurer is insolvent, there can be no offset for other benefits or payments.
Again, to recover the most compensation possible, it’s crucial to partner with an experienced car accident lawyer who understands these complex insurance laws and how to maximize your claim.
Possible Third-Party Claims in No-Fault States
In a no-fault car accident state, the rules for filing third-party claims differ from those in fault-based states. In no-fault states, each driver’s insurance company covers their medical expenses and other losses, regardless of who caused the accident.
However, there are certain situations when you can file a third-party claim, which involves seeking compensation from the at-fault driver’s insurance company.
- Serious injuries threshold – No-fault states often have a threshold for serious injuries. If your injuries meet or exceed this threshold, you may step outside the no-fault system and file a third-party claim against the at-fault driver’s insurance. Serious injuries typically include severe or permanent impairments, significant medical bills, or disabilities.
- Economic damages exceed policy limits – In some no-fault states, if your economic damages (such as medical expenses) exceed a certain limit, you may file a third-party claim against the at-fault driver. Substantial economic damages that surpass this limit warrant additional compensation beyond what the no-fault system provides.
- Death or permanent disability – If the accident results in a fatality or permanent disability, the injured party or their family may pursue a third-party claim. These situations often involve more severe and life-altering consequences, prompting the option to seek compensation beyond what no-fault coverage offers.
- Non-economic damages – In no-fault states, coverage typically doesn’t compensate for non-economic damages such as pain and suffering or emotional distress. You might file a third-party claim for these intangible losses if your injuries lead to such damages.
The rules and thresholds for filing third-party claims in no-fault states can vary significantly. Consulting with an attorney who handles car accident claims in your specific no-fault state is critical to determine whether your situation meets the criteria for filing a third-party claim.
Why You Need a Car Accident Attorney for a PIP Claim
After a car accident, you should always get the proper medical care immediately. Then, once your physical condition is stable, make getting legal help your next step.
Many people assume that because their PIP coverage is their own insurance policy, there is no need to hire a lawyer. This is not the case, however. Even your insurance company can make the claim process challenging. Every insurance company wants to limit payouts on claims, even for their own policyholders.
Trust Bagen Law to Help You Deal With a PIP Claim
When you partner with Bagen Law, we can ensure you present proper evidence of your car accident losses and help prove the benefits you deserve. We will respond to any requests from your insurer and negotiate for the full amount to cover your losses.
Our team can also identify when a third-party claim is available, which can increase the compensation you receive. We’ll handle the claim process with multiple insurers when necessary, and take the pressure off you.
While we manage the legal complications of your crash, you can focus on recovering from your injuries and attending treatment appointments without worrying about the legal process. Entrust your legal rights to the skilled car accident attorneys at Bagen Law to find peace of mind again.
Contact us for a no-cost, no-obligation consultation, and an experienced personal injury attorney can explain your rights. Call us at (800) 800-2575 or fill out our confidential online contact form to learn more today.