PIP (Personal Injury Protection) Claims After a Car Accident

Learn how PIP claims after an accident work in the dozen or so "no fault" car insurance states.

Personal Injury Protection (PIP) coverage and PIP claims have to do with "no fault" car insurance. No fault insurance exists in about a dozen states (District of Columbia, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah) and means that your own automobile insurer will pay some or all of your medical bills and lost earnings if you get into a car accident, regardless of who was at fault for the accident.

State legislatures enacted no fault car insurance as a way to try to streamline car accident insurance claims, especially smaller claims. Every state's law is different. In some "no fault" states, there is a limit to what benefits your own automobile insurance company will pay you; in others, there is no limit.

What is a PIP Claim?

A PIP claim is the claim that you make against your own insurer for payment of medical bills and lost earnings. Your insurer will pay your medical bills and will reimburse you for some or all of your lost earnings up to the amount of your claim -- or up to your state's no fault limit, whichever is lower. Some states have a two part medical bill limit. In those states, if the injured person has health insurance, the PIP insurer might only have to pay a small amount of the injured person's medical bills, and the health insurer will pay the remainder.

Either way, once your medical bills exceed your state's no fault limit, you are responsible for paying them. If you have health insurance, your health insurer will pay your medical bills from that point on. If you are on Medicare or a state run health insurance program through Medicaid, those entities will pay the bills. If you do not have health insurance, Medicare, or Medicaid, then you are responsible for working out payment arrangements with your health care providers.

In most no fault states, you are not permitted to make a claim for car accident injury damages against the negligent driver unless your medical bills reach a certain level or your injury is deemed sufficiently serious. For example, your state's no fault law might state that you cannot make a claim against the driver at fault unless your medical bills exceed $3,000 or you suffer a broken bone.

How Does a PIP Claim Work?

Let's take an example. Let's say that you got into a car accident, in which the other driver was at fault, and with the following facts:

  • your state's PIP limit for medical bills is $2,000 for people with no health insurance, but $8,000 for people with health insurance
  • your state requires PIP insurers to pay up to $5,000 of lost earnings
  • you have health insurance
  • you have $4,000 of medical bills and $1,000 of lost earnings
  • your state requires people injured in a car accident to have $5,000 of medical bills before they can make a claim against or sue the negligent driver.

In this case, because you have health insurance, you would submit only the first $2,000 of your medical bills to your car insurance company (i.e., your PIP insurer). You would submit the remainder of your medical bills to your health insurance company. Your car insurance company would also pay you $1,000 for your lost earnings. But because you only had $4,000 of medical bills, you did not meet your state's minimum medical bill requirement for filing a claim against the negligent driver.

So, you cannot file a claim against (or sue) the driver that hit you, and the only legal remedy that you are entitled to as a result of the car accident is to have your medical bills and lost earnings paid. You cannot claim any pain and suffering and have no legal right to sue the person that hit you.

Cooperate With Your Insurer in a PIP Claim

Most states require insured persons to cooperate with their insurance company in PIP claims. That means that the usual rules for dealing with an insurance company in a personal injury case must be disregarded. In most cases, you do not want to give a recorded statement to the defendant's insurance company. But, in a PIP claim, state law generally requires you to cooperate with your insurer. Your state's PIP laws may require you to give your insurer a recorded statement and will generally require you to attend a medical examination with a physician selected by the PIP insurer. If you fail to cooperate with your PIP insurer, the company is generally entitled to terminate your PIP benefits.

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