The Truth About PIP Coverage
Personal Injury Protection (PIP) coverage is a no-fault automobile insurance benefit which pays for medical bills, lost income, and other expenses resulting from injuries suffered in a motor vehicle accident in Maryland. With some exceptions, insurance companies selling insurance in Maryland must provide PIP coverage as set forth in § 19-505 of the Maryland Code, unless such coverage is affirmatively “waived” by the first named insured. Unlike most insurance benefits, PIP coverage is available to you regardless of whether you caused the automobile collision or not. A claim for PIP benefits must be submitted to your insurance company within one year of the date of your accident.
While it may be obvious that PIP benefits are available to the insured driver, not everyone knows that such coverage may be available to family members of the insured’s household injured by an uninsured motorist, passengers, pedestrians, people borrowing the insured’s vehicle with permission, and even people injured by a motor vehicle while riding on a horse and buggy. On the other hand, there are several ways that insurance companies may exclude a person from receiving PIP benefits. For example, you may be excluded if you intentionally cause a motor vehicle collision resulting in injury or you are injured in a car while committing a felony. Another way of losing your PIP benefits is through signing a waiver of these benefits.
Under § 19-505(a) and § 19-506, the first named insured can waive PIP benefits offered by the insurance company. To waive these benefits, the first named insured must first receive “written notice of the nature, extent, and cost of the PIP coverage” available. Then, the insured may waive the PIP benefits by signing a form which “shall clearly and concisely explain in 10 point boldface type” specific effects of the waiver. Once an effective waiver is executed, it is binding on every named insured, all listed drivers, and the insured’s resident family members over sixteen years of age.
The true and often hidden benefit of PIP coverage is that it allows victims of automobile collisions to recover twice for their medical expenses and lost wages. To demonstrate, assume that you are injured in a motor vehicle collision caused by the negligence of a driver insured by State Farm. As a result of the collision, you incur $2,500 of medical expenses. Luckily, you did not waive PIP coverage, so your insurance company pays off these medical expenses. Even though your insurance company has paid these medical expenses, you can still recover $2,500 from State Farm for the same medical expenses, in addition to your pain and suffering.