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Gregory Perenich
21 April 2022

​How Do PIP Claims Work?

If you are a driver in Florida or a handful of other states with a no-fault insurance system for car accidents, chances are you have heard of PIP. You likely have purchased this insurance coverage, as drivers in no-fault states often do so to register their vehicles. However, while many people have a loose acquaintance with PIP, those who have never had to file a claim are likely not familiar with how it works.

What is PIP?

​How Do PIP Claims WorkPersonal injury protection coverage is a type of insurance coverage that is optional in all states and required in states that follow the no-fault insurance policy. Having a PIP policy does not mean that there is no fault for Florida accidents or that you can’t ultimately file a personal injury claim against an at-fault driver.This policy covers certain expenses related to your injury, regardless of who caused the accident. Only those who have met the state’s serious injury threshold or whose expenses have exceeded the limits of their PIP policy are permitted to seek compensation through the courts for their injury.

No-fault insurance became popular in the 1970s. Many of the states that required PIP coverage for their drivers repealed the laws after they found they sharply increased insurance premiums while offering such a small amount of compensation for medical expenses and wage loss that many claimants maxed out their policies and still needed to file lawsuits to cover their expenses. These issues remain common concerns with the no-fault system.

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Why Florida is Considering Repealing Its No-Fault System

The notion of repealing the state’s PIP requirements has been a common subject of lawmakers and bills. Gov. Ron DeSantis vetoed a bill in a recent year that would have done just that after insurers stated that doing so would cause consumer rates to increase by about $200 per year. However, more recently, the state’s Senate Banking and Insurance Committee passed a new bill by a vote of 10 to one to replace the PIP requirement with drivers carrying $25,000 in bodily injury coverage.

Defenders of the bill stated that the analysis used by insurers was flawed as it assumed everyone would decide to add $10,000 in medical payment coverage which would cause their rates to increase. However, this year’s bill requires drivers to opt in to medical payment coverage rather than opt out. Those who don’t choose to obtain the additional coverage could see a drop in their insurance premiums instead of an increase, according to Sen. Danny Burgess (R-Zephyrhills).

Burgess added that ending the PIP requirements in Florida would reduce the number of bad faith insurance claims filed in the state’s civil court against PIP insurance providers. Those opposed to the new bill—including The American Property Casualty Insurance Association—state that it would cause insurance rates in the state to rise as much as 77 percent, which would prompt more drivers to drive without insurance.

Florida is currently among the states with the highest numbers of uninsured drivers. According to the Insurance Information Institute, about 20 percent of Florida’s drivers do not have insurance.

What Are Florida’s PIP Requirements?

Florida requires all registered drivers to have proof of a property damage liability policy and a personal injury protection policy. The minimum amount of these two policies that drivers can have in Florida is $10,000 for PDL and $10,000 for PIP. The policy provides coverage to the policyholder and family members living in the same household and passengers who are injured while riding in the policyholder’s vehicle.

Additionally, PIP coverage can help with medical expenses and wage loss resulting from other accidents, such as pedestrian or biking crashes.

Like other no-fault states, Florida PIP provides compensation for medical expenses, wage loss, and death. Here is a look at each of these coverages.

Medical Expenses

If you are registered to drive in Florida, your PIP policy will cover medical costs, including:

  • Medical treatment and medication
  • Surgical services
  • Hospital expenses
  • Diagnostic services
  • Rehabilitation
  • Ambulance transport provided to you at the scene of the accident

Your policy will cover up to 80 percent of your medical costs. If your policy limit is the state minimum of $10,000, you would have $8,000 worth of compensation that you could claim from your PIP policy for medical expenses. If the injury is not an emergency, you can obtain up to $2,500 for medical treatment.

Wage Loss

Your PIP policy can also provide 60 percent of your wage loss for the time you missed from work due to your injury, up to your policy limits. With a $10,000 policy limit, up to $6,000 will be available for wage loss. PIP also provides compensation for providing household tasks that you previously performed yourself, such as housekeeping or laundry services.

Death

Florida PIP policies provide up to $5,000 in compensation if an accident kills the policyholder. This benefit compensates the victim’s family for costs related to the funeral service and burial or cremation.

What Isn’t Covered by PIP?

The main distinction between the type of coverage you can obtain through a PIP policy versus filing a personal injury lawsuit involves non-economic damages. Non-economic damages involve compensation for your injury’s impacts on your quality of life, such as pain and suffering or emotional distress. To seek compensation for quality-of-life impacts, you must be eligible to file a personal injury claim.

Filing a PIP Claim

To obtain compensation from your PIP policy, you must seek treatment for your injury within two weeks of the accident. Once you submit a claim to your insurer, they have up to 30 days to pay your benefits, though they have up to 60 days to investigate your claim if there is a suspicion of fraud. If you seek medical expenses, keep a log of all expenses until you and your insurer can settle your claim.

If you are planning to seek compensation for wage loss, you must submit wage and salary verification completed by your employer. This verification requires the employer to list your salary for the last 13 weeks before the accident. You can also obtain a statement from your physician regarding the impact of your injury on your ability to work.

Can My Insurer Refuse Payment on My PIP Claim?

Yes, the insurer can deny a PIP claim for several reasons, including:

  • You did not pay your premiums, and your insurance lapsed.
  • You failed to seek medical treatment for your injury within 14 days of the accident.
  • You have exceeded the limits of your PIP policy, resulting in some expenses not being covered.
  • Your medical treatment was not an emergency, resulting in a reduction in your compensation.

When You Can Seek Compensation Through a Lawsuit

In Florida, if a car accident injured you, you still have a right to sue the at-fault party for compensation if your injury results in more than $10,000 of expenses or meets the state’s serious injury threshold. The serious injury threshold in Florida includes permanent injuries within a reasonable degree of medical probability, resulting in permanent loss of an important bodily function, significant and permanent scarring and disfigurement, or death.

The other States With No-Fault Insurance Requirements

There are currently 11 states in the nation, along with Puerto Rico, requiring PIP policies and functioning under the no-fault insurance requirements.

Those states and the amount of PIP coverage they require include:

  • Hawaii: $10,000 personal injury protection
  • Kentucky: $10,000 personal injury protection
  • Massachusetts: $8,000 personal injury protection; with an uninsured/ underinsured motorist policy of $20,000 per person and $40,000 per accident
  • Michigan: $50,000 – unlimited coverage. In Michigan, drivers must choose the medical limit for their PIP policy based on need and budget. The state changed its insurance coverage requirements in 2019 to make personal injury protection coverage more affordable to all people.
  • Minnesota: $40,000 personal injury protection
  • New Jersey: $5,000 personal injury protection; with an uninsured/underinsured motorist policy of $15,000 per person and $30,000 per accident.
  • New York: $50,000 personal injury protection
  • North Dakota: $30,000 personal injury protection
  • Pennsylvania: $5,000 personal injury protection with an uninsured/ underinsured motorist policy of $15,000 per person and $30,000 per accident.
  • Puerto Rico: $3,000 personal injury protection
  • Utah: $3,000 personal injury protection

In Kentucky, New Jersey, and Pennsylvania, motorists can opt out of the no-fault insurance system and obtain the unlimited right to sue the at-fault driver.

Four other states practice a fault system, but require drivers to purchase a PIP policy for added protection.

Those four states include:

  • Arkansas: $15,000 personal injury protection
  • Delaware: $15,000 per person/ $30,000 per accident personal injury protection
  • Maryland: $2,500
  • Oregon: $15,000

What are the Pros and Cons of a No-Fault Insurance System?

One benefit of the no-fault insurance system includes relieving the burden on the court system of handling so many personal injury car accident claims. There are about six million car accidents in the U.S. each year, resulting in about three million injuries.

The no-fault system compensates you for many of these injuries through your own policy. In addition to fewer lawsuits, no-fault insurance typically results in quicker payouts on claims because there is no need to prove fault.

Unfortunately, the PIP requirement generally results in higher premiums in no-fault states. Additionally, the no-fault scheme limits a claimant’s options for seeking compensation after an injury. It can result in fewer consequences for careless or reckless drivers as they are only liable for serious injuries they cause.

How a Personal Injury Lawyer Can Help with Your PIP Claim

People in no-fault states often believe that you must be seriously injured and planning to file a lawsuit to hire an attorney. Personal injury attorneys can provide many services to help their clients with PIP claims.

These services include:

  • Going over your policy with you to explain the available coverage to compensate for your injury.
  • Assisting you in filing your claim and tracking your expenses.
  • Sending a demand letter to your insurance provider if they have delayed payment of your PIP benefits.
  • Obtaining medical records and evidence showing that you have exceeded the limits of your PIP policy or that your injury is serious and warrants the right to step outside the PIP system to obtain compensation through the personal injury claims process.
  • Filing a legal claim for bad faith insurance practices if your insurance provider refuses to pay the PIP benefits you may receive