PIP Benefits – The Basics

Kitsap Personal Injury Attorney Jennifer Witt

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In the State of Washington, auto insurance carriers are required to offer PIP, or Personal Injury Protection, to their insured. This type of benefit is essentially a no-fault coverage that kicks in when you are injured in an auto accident. It can also be used where the driver of a car injures a pedestrian. The pedestrian is allowed to use the driver’s PIP coverage to assist with medical bills.


Why Do I Need PIP If I Have Bodily Injury Coverage?


The reason that PIP is so important is that, following an accident, the at-fault driver’s insurance does NOT pay your medical bills. Many people mistakenly hand over the at-fault driver’s insurance information at the hospital or doctor’s office believing the medical provider can simply bill third party from the start. This is not true. And, if you do not have medical insurance or PIP, you will be immediately on the hook for those bills. Your Bodily Injury Coverage will possibly cover injuries to your passengers or to those you injure if you cause an accident.


So When Does Third Party Pay My Bills?


After your case is settled through negotiation or a trial (assuming you prevail), your attorney will take the proceeds of your settlement and pay the medical providers. Prior to settling your case (which can be many months or years), the medical providers will file a medical lien against your case or may send your medical bills to collections. If your medical bills were paid through PIP, you will likely need to pay that amount back (subrogation) at a reduced rate. However, there are situations where your carrier will waive subrogation.


What Does PIP Cover?


PIP can be used to cover medical expenses and loss of income due to your accident. The minimum that a non-commercial policy can offer for PIP benefits is: (a) $10,000 medical, (b) $2,000 funeral, (c) $10,000 income continuation limited to $200/week, and (d) $5,000 loss of services limited to $200/week. There are larger PIP policies available so it is important to ask your agent to provide quotes if you would like a higher policy. If you do not reject PIP, the minimum policy will be included.


How Can PIP Help Avoid My Bills Going To Collections?


The standard PIP policy is usually $10,000 but you can opt to have a much higher policy. Occasionally, we see a $35,000 policy, which is very helpful. This means that your medical providers will bill your PIP policy just like it was medical insurance (however, there is not negotiated lower rate). The providers will bill your PIP until you reach the maximum benefit and the remaining balances are your responsibility. If you have medical insurance, the provider may then start billing insurance. As long as medical providers are paid, they will not send you to collections.


What If My Insurance Carrier Says I Don’t Have PIP?


In the State of Washington, you must affirmatively reject PIP in writing. If there is a dispute about coverage, the insurance company must provide your attorney with the document with your signature indicating your rejection. If the company cannot provide proof of your signature, they must offer at least the minimum $10,000 policy to you.


What Are Some Of The Challenges With PIP?


For PIP to apply, your care must be (a) reasonable, (b) necessary, (c) related, or (d) incurred within three years of the injury. So, your physical therapy will likely be reasonable and necessary but your subscription to a mail order food service is not. Certain insurance companies really like to mess with this type of denial. They will assert that, after paying out $2,000, they feel your care is no longer medically-necessary. They will have an “independent” review done of your records or have you submit to an Independent Medical Exam (IME). These are not really independent as the chiropractor or doctor will be chosen and paid for by the insurance company.


When Does PIP Not Apply?


There are some restrictions to using your PIP policy. If you intentionally hurt someone, such as ran them over or intended to cause damage and someone was injured in the process, your policy would not apply. There is also an exclusion for coverage if you commit a felony while you are injured. Similarly, if you are injured while racing your vehicle (under the statute that covers this term), your insurance company would likely deny your benefits. Most importantly, make sure you have all of your vehicles listed on the declaration page of the policy. If you or a relative are injured in a car that you own but was not on the policy, the company will not pay benefits. There are a couple of other random exclusions such as war and nuclear events that are included but the basic take away is that you should not commit a felony while driving and that all of your vehicles are listed on your declaration page.


Can A Company Stop Paying My Benefits?


Yes. If the insurance carrier believes that your treatment does not meet one of the basic requirements such as reasonable and medically-necessary, the company can refuse to pay bills in the middle of your treatment. If this happens to you, your attorney will assist in trying to regain your PIP benefits. If you are not represented and your insurance carrier has refused to pay under your PIP benefit or ordered a PIP Termination Exam (PTE), contact a lawyer today. Depending on the facts, they may be facing a bad faith insurance claim. There are many reasons for using your PIP benefits (reduced pay back and avoiding bills going to collections) but there are also certain requirements under Medicare Secondary Payer Rules that PIP be used before Medicare or Medicaid pays for any treatment. It is important to understand your benefits and how to maximize them in the event you are injured in an auto accident or were hit as a pedestrian by a car.


PIP benefits are critical to covering you in an accident yet they can be confusing in how and when they apply. For any questions regarding PIP benefits or your car accident, please do not hesitate to give our office a call.