What Is PIP Insurance?

As providers of medical claims review service for insurers, lawyers and physicians, we often have to deal with questions regarding various types of insurance coverage, appropriateness of the medical services provided to a claimant, medical necessity and other related aspects. Considering the significance of insurance claims processing in the event of a personal injury, it is indeed important to understand various insurance coverage options. Here are some facts about PIP or Personal Injury Protection, a type of auto insurance coverage beneficial to people who are injured in auto accidents.

PIP Insurance Available in Some US States

PIP is not available in all US states, but is required in others. It is often called “No-fault” coverage because it is designed to be paid without regard to “fault” or legal liability. However, “no-fault” doesn’t mean that the insurance premium of the claimant will not increase. Florida requires this insurance coverage (minimum PIP benefits in an insured person’s policy) for all its drivers. In fact, any vehicle registered in Florida has to carry PIP coverage even if that vehicle is not in use, or is in another state part of the year. A resident of Florida who has PIP coverage is covered even while driving the vehicle outside the state of Florida. Any doctor/hospital will be paid under this benefit program for medically necessary treatment due to a covered injury.

PIP Insurance FAQs

Here are some FAQs on PIP with regard to the state of Florida, which may be applicable to other No-fault states also.

 For auto accident-related injuries, PIP-Medical coverage is the primary coverage that comes before any other insurance. Other insurers may reject the claims sent to them until a person’s PIP coverage is exhausted.

 The insurer typically asks the claimant to sign a medical authorization form in order to communicate with the claimant’s medical providers and obtain medical reports and records for medical records review.

 The insured person and all resident relatives are covered under the PIP coverage. Resident relatives (any relative by any degree of blood or marriage, typically residing at the home of the insured person including a resident relative temporarily residing somewhere else, for e.g. a student away at college) needn’t be listed drivers on the policy for the coverage to apply.

 It covers medical benefits, disability benefits and death benefits.

• Death benefits payable for an insured person is $5,000.
• Medical benefits are payable at 80% of the amount incurred due to a covered injury.
• Disability benefits are payable at 60% of any lost wages incurred due to a covered injury.
• The total amount payable under PIP insurance for any one accident is $10,000.

 Florida Motor Vehicle Law allows a deductible of no more than $1,000 for PIP coverage.

• Choosing a deductible is optional. If you elect one, it will lower the premium.
• Work loss exclusion is allowed under the law. If elected, your premium will be lower and you will not receive any benefit from lost wages due to a covered injury.

 PIP coverage applies when the insured person or any resident relative is injured while occupying a motor vehicle. It also applies when an insured person is struck by a motor vehicle as a pedestrian.

 Regardless of any health insurance the injured person carries, PIP benefits are payable if the insured person sustains an injury due to a covered event.

 PIP insurance is the same from one insurance company to another. Florida law has prescribed all aspects of this insurance, which companies and policyholders must stay compliant with.

 PIP benefits will not increase in keeping with the number of cars on a person’s policy. Though a premium is collected by the insurance company for each motor vehicle listed on the policy, it doesn’t increase the benefits.

 If the claimant has other applicable PIP for the same injury, the maximum that is collected is $10,000 required by law. Each company’s policy will be responsible for their pro-rata share of benefits payable.

 If a person cancels his/her PIP policy and has a registered vehicle, the insurance firm would notify the Florida Motor Vehicle Department regarding the same. The Department would send a notice to the registered vehicle owner inquiring the details of any new policy that may have been purchased. If the vehicle owner doesn’t respond to the notice or fail to maintain the required PIP coverage, his/her driver’s license may be suspended.

PIP Benefit Exclusions

 Benefits will not apply if the person owns a car that is not insured under his/her auto insurance policy and is injured in that vehicle.

 Injuries sustained by a person driving a covered motor vehicle without the insured person’s express or implied permission will not be covered.

 Intentional bodily injury of any type is not covered.

 Injuries sustained when carrying out a felony are not covered.

 Benefits will not apply to a person other than the injured person or a resident relative, and who has coverage under another Florida auto insurance policy which has PIP benefits.