What Car Accident Victims Need to Know About Personal Injury Protection (PIP)

Personal injury protection, also known as PIP insurance, can be extraordinarily valuable after an auto accident—unfortunately, many policyholders have not been adequately informed by their insurance companies about this vital protection. Here, the auto accident attorneys at Azrael, Franz, Schwab & Lipowitz detail the necessity of PIP insurance.

Brief History of PIP Insurance

Before PIP insurance coverage was mandated in Maryland, there was concern by legislators and attorneys of the “chilling effect” insurance companies could have on auto accident victims. Insurance companies would sometimes attempt to delay settlement with an auto accident victim, which would discourage them from seeing a doctor for medical treatment after an accident because of concerns that they would not have the funds available to cover the care. This could leave auto accident victims without care for serious injuries and allow insurance companies to only pay a fraction of what they would have—should the victim have received the care they required. As such, attorneys and legislators advocated for PIP insurance, which would be available regardless of the nature or cause of an accident and provide immediate funds for medical treatment and other expenses after an accident.

PIP Insurance Process

The purpose of PIP insurance is to provide immediate funds for reasonable expenses, such as medical care and lost wages after an auto crash. In the state of Maryland, insurance companies are obligated to provide their policyholders with at least $2,500 worth of PIP insurance, unless a policyholder signs an agreement waiving their right to it. Because PIP insurance is a type of “no-fault” insurance, it can be used regardless of the nature of the accident or who caused it, and the insurance company cannot raise the insurance premiums of the policyholder for the use of their PIP insurance. Any reasonable, accident-related medical expenses or lost wages will be billed to the insurance company, which will deduct these expenses from the PIP coverage until the expenses are covered, or until the PIP insurance level has been reached.

Why Policyholders Need to Have PIP Insurance

When an insurance company determines a policyholder’s rates, they are able to use specific factors—such as the policyholder’s age, sex and driving history—to determine how likely it would be for them to cause an accident. While this holds true for accidents caused by a policyholder, it is not the case for accidents where the policyholder is a victim. Because the goal of an insurance company is to pay out as few funds as possible—and PIP insurance is a guaranteed pay-out—insurance companies tend to minimize the value of PIP insurance to policyholders and will often encourage policyholders to forego it entirely, especially if they have health insurance, or accept only the bare minimum PIP coverage, which is $2,500.

It is critical that policyholders do not forego PIP insurance coverage, as it is one of the quickest, most inexpensive, risk-free and effective ways to cover expenses after an auto accident. In fact, the attorneys at AFSL recommend upgrading to the maximum, $10,000 PIP insurance coverage, which is often available for only a modest additional cost. Do not let your insurance company convince you to give up this vital protection—if you have been in an auto accident or have any questions about your PIP coverage, or if your insurance company falsely claims you have waived your PIP coverage, contact the auto accident attorneys at Azrael, Franz, Schwab & Lipowitz immediately for a free consultation. 

 

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