Personal Injury Protection (PIP) coverage, also known as No-Fault Coverage, is one of two types of automobile insurance coverage that is mandatory in the State of Florida (the other mandatory coverage is property damage coverage). PIP coverage is used to pay your medical bills and lost wages following an accident regardless as to who is at fault for the accident (hence the term No-Fault coverage). Essentially what this means is that regardless as to who’s at fault for an accident, your own insurance company will pay your medical bills and lost wages up to the maximum coverage amount. Florida requires a minimum of $10,000 in PIP coverage, although many companies allow a person to buy additional PIP coverage beyond $10,000.
Generally, PIP coverage pays your medical bills at 80% and your lost wages at 60%. The other 20% of your medical bills and 40% of your lost wages not paid by PIP is something your attorney will attempt to collect from the at-fault driver’s insurance company, or in certain circumstances from your own insurance company under your uninsured motorist (UM) coverage in the event the at-fault driver did not have bodily injury/liability coverage.
Most people who have never been involved in an accident or never received medical treatment or lost wages as a result of an accident are surprised to hear that their own insurance company is the one responsible for paying their medical bills and lost wages. As a result, people sometimes question whether or not they want to proceed with medical treatment for fear that their insurance rates will increase. However, keep in mind that PIP coverage is mandatory coverage that is required in order to operate a motor vehicle in the State of Florida. Thus, if you are injured in an accident the law requires your insurance company to pay your bills since Florida is what is referred to as a NoFault State (a state that requires its drivers to maintain PIP or No-Fault coverage on their policies). As a result, your insurance company should pay your medical bills and lost wages without issue since you paid for this coverage and it is the law, right? Unfortunately, that’s not always the case.
Since PIP coverage is mandatory in the State of Florida, it is the primary source of insurance coverage for medical bills. What this means is that if you receive medical treatment as a result of an automobile accident, your doctor is required to bill your automobile insurance company first in order to receive payment. In the event you also have health insurance, your doctor may bill your health insurer as well, however, your health insurer will require your automobile insurance company to pay their 80% of the medical bill before health insurance benefits are paid. It is very important that your medical bills are being paid under your PIP coverage as required by the terms and conditions of your policy and according to Florida law. Otherwise, it is possible for a situation to arise where no health insurance company and possibly not even the other driver’s insurance company will consider your outstanding medical bills unless and until the first 80% is paid by PIP coverage.
As mentioned above, all too often insurance companies fail to pay medical bills and lost wages under PIP coverage despite the hundreds or thousands of dollars you have paid in insurance premiums for your coverage and regardless of the intent of the PIP statute (law) (which is to provide swift payment of medical bills regardless as to who’s at fault for an accident). Again, insurance companies are “for profit” companies whose number one priority is to make money. Thus, the more they have to pay out for medical bills and lost wages, the less money they make. This is something to keep in mind as we move throughout not only our discussion of your PIP coverage but also in considering any first party coverage (meaning the coverage provided to you by your own insurance company – clearly the other driver’s insurance company is going to do everything they can to minimize their payment to you as well).