The interplay between different insurance benefits and coverages in the context of a Maryland car accident case can be highly confusing. This blog will focus on personal injury protection benefits and how to utilize them to maximize your compensation when you have been injured in a car crash.
A brief bit of history is in order. Maryland required that all auto insurance policies provide personal injury protection benefits (P.I.P.) until the insurance industry, under the guise of making policies more affordable, persuaded the Maryland legislature to make P.I.P. optional.
This did somewhat reduce the cost of the policies but the overwhelming benefit went to the insurance companies, who no longer were compelled to include a benefit that cost the policyholders very little and the insurance industry quite a bit. Think of it, P.I.P. can be used for medical benefits and lost wages in every single car crash, whether the driver is at fault or not. This did not sit well with the insurance carriers who were required to pay even where their policyholder was at fault. In some ways the more accidents one was in the more one could use this benefit!
So, P.I.P. became optional, something that one could waive to save money and waive people did. Insurance agents could offer cheaper policies and could rationalize to their policyholders the fact that they had health insurance so "why do you need p.i.p.?"
The answer of course is that health insurers strenuously resist paying bills in car crashes, many policyholders sadly cannot afford health insurance and many people do not have the benefit of sick leave from their work.
So unfortunately many people injured in Maryland do not benefit from P.I.P. but to those who do here are some suggestions.
#1 Always prioritize lost wages in using your P.I.P. benefits. If you get hurt in a collision tell your lawyer and tell the P.I.P. insurer that you want wages paid first. This will ensure that you and your family have at least some money coming in while you recover. Even if you have sick or annual leave, you are entitled to have P.I.P. for wages and you will be glad you used it because a future illness might keep you off of work and if you have used up all your leave for the collision you won't get paid when you are sick.
#2 Always use your health insurance (If you have it) rather than P.I.P. to pay accident-related medical bills. Why? First look at #1 above, second while your health insurer may be initially uncooperative about paying such bills, they can be compelled to do so and they will pay much less for the care than either P.I.P. or paying your medical bills out of your settlement or verdict.
For example, you get an x-ray. The hospital sends you a bill for $65.00 and P.I.P. would pay $65.00 or you would pay $65.00 out of your settlement. The health insurer pays $28.00 on your behalf and wants their payment back at settlement. Who gets the $37.00 extra? You do. Mostly.
That's right you get it. You see the $65.00 bill goes to the liability insurance company and they pay you that sum. You may have to pay back Blue Cross what they paid but typically will reduce what they are repaid by one third in recognition of the fact that you will pay your lawyer at least tha amount. So on a $65.00 x-ray bill you pay them back $19.00 and leaving $46.00. Your lawyer gets one third or $15.00 and you keep the remainder, not bad.
There are many more tricks to P.I.P. and you should contact an experienced lawyer to help you.