Often it takes a motor vehicle collision to realize that your auto insurance is insufficient and not comprehensive. This blog post is the first in a series that identifies critical elements of your auto insurance coverage and how to ensure that, going forward, you have maximum protection in the event of an accident. One very important and perhaps overlooked aspect of your coverage is PIP, or Personal Injury Protection.
What Is Personal Injury Protection (PIP)?
PIP provides first-party benefits to you and every occupant of your vehicle in the event of a motor vehicle collision. Specifically, it offers payment for medical bills and lost wages regardless of fault. While most drivers carry the minimum amount of $2,500, you can purchase up to $10,000 in PIP coverage depending on your insurance carrier.
The basic public policy idea behind PIP is that an injured motorist should not have to hesitate to seek medical treatment, such as an ER visit or physical therapy, due to concerns about paying the bill. Although $2,500 is not an enormous amount of money in light of today’s skyrocketing cost of medical services, it still provides a small base of treatment for an injured driver or passenger.
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What Will Insurance Companies Tell You About PIP?
However, the insurance companies are as duplicitous as ever these days and will do everything in their power to prevent you from obtaining PIP. In other words, they will trick you into “waiving” PIP. It is not mandatory and it can indeed be waived, or excluded from your policy. However, your insurance company must let you know how much you are saving in your premium by waiving PIP. While the insurance companies can spin the cost of these savings any way they want, in reality, the savings are MINIMAL!
How can you actually use this?
PIP is an inexpensive component of your policy and you should always ask for a specific breakdown when obtaining or readjusting your auto coverage. Whether online, over the phone, or in person, insurance companies will continue to maintain that PIP is an unnecessary and expensive addition to your policy. This could not be any farther from the truth and here is one recent example of what a new client told me during an intake for her personal injury claim: “My insurance agent told me that I didn’t need PIP because I have health insurance and that would pay for all my medical bills.”
Well, guess what happened? Her health insurance only paid for the hospital bill after her ER visit. It did not pay for her emergency physicians bill and it did not pay for her radiology bill (those are the three common bills you receive from one ER visit). Sometimes hospitals and other medical providers will not bill your health insurance if they become aware it is related to a car accident. Sometimes there is no rhyme or reason as to why your health insurance pays or does not pay a particular bill. Furthermore, many physical therapists and chiropractors will not bill health insurance for their services. For all of these reasons, if my new client had purchased PIP coverage, she would not have had to worry about any of her ER bills. Also, she could have used some of her PIP coverage to defray her physical therapy bill.
What’s the real story?
Unfortunately, our firm sees PIP “waivers” every day and are only able to inform our clients about this insufficiency in their auto coverage “after the fact.” In the context of a personal injury claim, PIP coverage will provide our clients with a higher settlement check because of the fact that some, if not all of their medical bills, have been paid through their auto insurance.
That is why I encourage everyone to not only make sure they have PIP coverage but to INCREASE their PIP to $5,000, if not more. In addition, you should always ask for Med-Pay coverage if it is available. This provides even more first party medical payment and/or lost wages coverage at an inexpensive addition to your policy.
DON’T SETTLE FOR ANYONE ELSE!
CRITICAL ELEMENTS OF AUTO INSURANCE COVERAGE:
- Part 1: MAXIMIZE YOUR AUTO INSURANCE: DO NOT WAIVE PIP
- Part 2: MAXIMIZE YOUR AUTO INSURANCE: UNDERSTANDING UM/UIM COVERAGE
- Part 3: MAXIMIZE YOUR AUTO INSURANCE: ALWAYS CARRY COLLISION COVERAGE