What is Personal Injury Protection? – Personal Injury Protection (PIP) is coverage offered through one’s own insurance that is “No Fault,” i.e., it will cover the insured and his/her vehicle’s occupants regardless of whose fault the accident was. Unfortunately, many people waive this coverage to save a few dollars on their premiums. If not waived, the coverage will provide for $2,500, $5,000 or $10,000 worth of medical treatment, 85% of lost wages, or a combination of both up to the limits previously noted, whichever that person elected and paid for. This benefit goes through the injured party’s insurance, even if the other driver is insured and is clearly at fault, and it will not harm one’s policy to utilize the benefit. There is a similar benefit that some companies provide, called “Med Pay.” This applies only to reimbursement for medical billing, versus PIP which can also go towards lost wage reimbursement.
Uninsured Motorist coverage (UM) is for those instances where the other driver is at-fault and doesn’t have applicable coverage or where another driver is at-fault and flees the scene. It will provide coverage for medical bills, lost wages, and pain and suffering up to the limits of your policy, keeping in mind that the insurance adjuster determines what is “reasonable” for each of those elements of damage. If an insured disagrees with their insurance company’s evaluation, a judge or jury will have to help resolve that issue in litigation. It should be noted that one can often get this coverage through a family member or member of the household if that family member has a vehicle with such coverage, even if the passenger didn’t own a vehicle themselves. Also, if an injured party is a passenger in a vehicle, s/he is likely eligible for UM benefits under that vehicle’s coverage (as well as his/her own if that other coverage exceeds that of the vehicle the injured party was in).
Underinsured Motorist coverage (UIM) is for those instances where the other driver is at fault and has insurance, but the at-fault vehicle’s insurance is insufficient to cover one’s damages. For instance, if the person who rear-ends the injured party has $30,000 in coverage but the injured party has $100,000 in UM/UIM benefits, the injured party would be entitled to a total of $100,000 in benefits. The at-fault carrier would be “on the hook” for the first $30,000 and the injured party’s insurance would be responsible for the remaining $70,000 in coverage. Again, please see above, i.e., one would still need to prove his/her damages such that just getting hurt in an accident with a $100,000 UIM does not lead to an automatic $100,000 settlement. To the contrary, in most instances, it would require a rather severe injury or permanency to receive a $100,000 settlement. A judge or jury is typically required to resolve these disputes, as insurance carriers are reluctant to make “policy limits” offers absent serious injury, surgery, permanency or a limited policy, i.e., $30,000.
Each of these potential coverages are considered “First Party,” that is, they are contractual and through one’s own insurance carrier as opposed to “Third Party,” where the coverage the injured party is seeking comes from an at-fault party. As such, the terms of the particular policy in play and what the injured party actually bargained for in that agreement will be critical to determining what that particular insurance company is supposed to provide to its insured.
Thanks for reading. If you have any questions about this post or any aspect of any case you might have, please feel free to contact me at your convenience at 410-793-7040 or Jared@BmoreAttorney.com. I’d be happy to discuss the matter with you.