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PERSONAL INJURY PROTECTION INSURANCE: A Short Guide

PERSONAL INJURY PROTECTION INSURANCE IS COMMONLY CALLED “PIP.”

THIS ARTICLE DISCUSSES:

  • PIP in General
  • Main Types of PIP
  • Maximizing PIP Benefits
  • Special Situations

PIP IN GENERAL

Under Kentucky law, auto insurance is mandatory.  Personal Injury Protection insurance (commonly called PIP insurance) is a part of the mandatory auto insurance Kentucky requires.  A typical Kentucky auto insurance policy provides no less than $10,000 per person for PIP insurance to pay medical expenses, lost income and similar “out of pocket” costs due to a motor vehicle injury.  PIP is paid by the insurer of the vehicle the injured person is using at the time of a motor vehicle injury, regardless of fault.  Additional PIP coverage above the basic amount of $10,000 is optional.  PIP can be purchased with a deductible up to $1000.  Burman Law does not recommend purchasing PIP with a deductible.

TYPES OF PIP INSURANCE

There are four main types of PIP insurance:
  1. PIP MEDICAL LOSS is used to pay medical bills.  The medical bill must be for reasonable charges incurred for reasonably needed medical services, products, accommodations, rehabilitation, licensed ambulance services, and other remedial treatment and care.
  2. PIP WORK LOSS is used to replace income lost because the injured person cannot work.  It is also used to pay for expenses reasonably incurred by the injured person in obtaining services to replace those the injured person would have performed for income.  Unfortunately, unless additional PIP is purchased, the basic PIP work loss claim is limited by law to $200 per week.
  3. PIP REPLACEMENT SERVICES LOSS is used to pay for “in-kind” expenses reasonably incurred in obtaining ordinary and necessary services the injured person would have performed, not for income, but for the benefit of the injured person or the injured person’s family.  The $200 weekly maximum applies.
  4. PIP SURVIVOR’S REPLACEMENT SERVICES LOSS is used to pay expenses reasonably incurred by survivors after a person’s death to cover ordinary and necessary services the person would have performed if the person had not died from a fatal motor vehicle injury.  The $200 weekly maximum applies but can be prospectively applied to exhaust the entire $10,000 in basic PIP.

MAXIMIZING PIP

Maximize PIP MEDICAL LOSS by directing that certain medical providers be paid first.  In some cases, it may be advantageous to send the PIP carrier $10,000 worth of unpaid medical bills and direct the PIP carrier to pay the $10,000 in basic PIP to an escrow  account. This is a highly technical area of law, so consult Mike Burman. Maximize PIP WORK LOSS by reserving and directing, in writing to the PIP adjuster, that all PIP wage loss be paid before any medical providers are paid.  Always get a work excuse from the doctor showing it is necessary to be off work due to the motor vehicle injury and the period of time off work.  Again, this is a highly technical area of law, so consult Mike Burman. Maximize PIP REPLACEMENT SERVICES LOSS by saving written invoices to prove these expenses were actually incurred.  Take photographs of the work performed. Maximize PIP SURVIVORS REPLACEMENT SERVICES LOSS by completing an affidavit to detail the services and expenses reasonably incurred by survivors for valuable services that would have been provided had the injured person survived the motor vehicle injury.  Again, this is a highly technical area of law, so consult Mike Burman.

SPECIAL SITUATIONS

Assigned Claims Plan:  When a vehicle owner does not have PIP insurance, the people injured in the owner’s vehicle are entitled to file a claim for basic PIP insurance through the Kentucky Assigned Claims Plan.  Contact Mike Burman for assistance with the Kentucky Assigned Claims Plan. Coordination of PIP Insurance:  In some cases, the payment of PIP insurance can be directed and coordinated with health insurance to process all medical bills.  In some case, PIP can be used to pay co-pays, deductibles, and non-covered items. Motorcycles:  Basic PIP insurance is optional for motorcycles. Unless basic PIP insurance is purchased for the motorcycle, neither the operator nor the passenger of the motorcycle is entitled to collect basic PIP benefits from any source.  Other insurance may be available, so consult with Mike Burman to determine available coverage. Out of State Owners:  Non-residents of Kentucky driving through the state may be “deemed” to have PIP insurance but this is dependent on the whether the underlying auto insurance carrier is licensed to sell auto insurance in Kentucky.  Contact Mike Burman for assistance. Workers’ Compensation Situations:  Employment at the time of a motor vehicle injury, may provide under Kentucky Workers’ Compensation law:
  • Primary coverage for related medical expenses
  • 2/3 wage replacement for time off work
PIP wage loss insurance can be coordinated to pay the remaining 1/3 wage loss. This is a highly technical area of law, so consult Mike Burman.
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