You were driving innocently when suddenly another driver rear-ended you causing various personal injuries that may have resulted in lost wages not to talk about your damaged vehicle. You have gone to the hospital and/or your doctor’s office. Medical expenses are accumulating. What do you do? Generally, Personal Injury Protection (PIP) insurance was set up in Maryland (and other states) so that an injured party could pay some medical expenses and lost wages without feeling pressured to settle their case before damages are ripe. However, some people are confused about what it actually means for them. For instance, if your insurance pays medical expenses on your PIP claim, will your insurance company subsequently increase your insurance premiums? Rules vary depending on your state however for Maryland drivers, here are some answers:
No insurance premium increase: PIP is considered a no-fault coverage. In 2009, the Maryland General Assembly enacted legislation to require an insurer that issues a policy that contains PIP coverage may not increase your premiums due to a claim or payment made under that coverage.
No subrogation if PIP is claimed: Subrogation is a legal right that allows your insurance company to make a payment that is actually owed by the other driver’s insurance company and then collect the money from the party that owes the debt after the fact. However, in Maryland, an auto insurance company does not have a right of subrogation on PIP claim which means that if you collect $2,500 from your (PIP) insurance, the other party’s insurance company cannot reduce your settlement by $2,500 because they are not allowed to subrogate their expense. What this means is theoretically and legally, you can collect insurance benefits from both your insurance and the at-fault party’s insurance in connection with losses incurred from an auto accident in Maryland.
PIP Covers owners and passengers: In Maryland, PIP insurance covers not only the owner of the vehicle but a driver granted permission to operate the vehicle according to Maryland Code Ann., Ins. § 19-505(a)(1). Also included are any passengers inside the insured’s vehicle as well as any pedestrians struck by the car.
PIP covers medical expenses and 85% of lost wages: PIP covers medical, hospital and disability expenses for anyone in the insured vehicle or pedestrians outside the car. This includes medical bills as well as up to 85 percent of income lost up to $2,500—unless the insured purchases a policy providing greater coverage. If PIP is not waived, $2500 is the minimum coverage. An injured individual may only claim lost income if that person was employed at the time of the accident; the policy will not cover potential income lost due to injury.
No matter who caused your accident, medical bills incurred as a result of a Maryland car accident and lost wages (up to 85%) are first submitted to your insurance company to be paid under your PIP (no fault) coverage.
If you do not have PIP or health insurance, you are responsible for the initial payment of your medical bills, however; some health care providers will agree to wait until your claim resolves to be paid.
If you recover the amount of your medical bills as part of your injury claim, you do not have to repay your insurance company for the medical bills it paid under your PIP coverage and your insurance premiums will not be increased either.