Personal Injury Protection Benefits Rejection

People with auto coverage in Weatherford, Mineral Wells, Aledo, Millsap, Azle, Springtown, Brock, Willow Park, and other places in Parker County might think they have Personal Injury Protection (PIP) benefits, when they actually do not.
The Austin Court of Appeals issued an opinion in 2003, that can be a little confusing. The style of the case is, Kathryn Payne and Carnell Gulley v. Mid-Century Insurance Company of Texas. Here is some background.
Payne and Gulley filed a lawsuit against Mid-Century alleging they were entitled to PIP benefits under the terms of an auto liability policy issued by Mid-Century. Both sides filed motions for summary judgment and the trial court ruled in favor of Mid-Century. On appeal, the trial court ruling was sustained.
Certain facts were agreed upon: The same insurance agent had written policies on the family since 1991. In 1994, Kathryn’s mother purchased a policy naming Kathryn as the rated driver and signed an agreement deleting PIP coverage. Thereafter, Kathryn and her parents, Wanda and Rodger were named insureds in a Farmers policy. In 1996, Kathryn signed an agreement rejecting PIP coverage in connection with that policy. The waiver provided that the “rejection shall apply on this policy and all future renewals or replacements of this policy.”
In 2001, the policy cancelled and the Mid-Century policy became effective and was the policy in effect at the time of the accident in issue here. Wanda Payne had signed a PIP rejection but Kathryn had not. The declarations page reflected no PIP coverage and no premiums were paid for the coverage.
Texas Insurance Code, Section 1952.152, states that PIP coverage in automatically in every policy issued in Texas unless it is rejected in writing.
Mid-Century lawyers alleged two reasons for denying coverage: (1) the Mid-Century policy was a renewal of the earlier policy by an affiliated company, Farmers, therefore Kathryn Payne’s 1996 waiver of coverage in connection with the Farmers policy applied to the Mid-Century policy, and (2) Wanda Payne’s 2001 waiver of PIP coverage was effective as to the Mid-Century policy because she was both an “insured under the policy” and Kathryn Payne’s agent authorized to waive coverage on her behalf.
Payne on the other hand, says the written rejection by Kathryn signed in 1996 was ineffective as to the Mid-Century policy for two reasons. First, although the Mid-Century policy might be considered a replacement of the Farmers policy, it could not be a renewal because the earlier policy insured three persons, Kathryn and her parents, while the Mid-Century policy covered only Kathryn. Further, Kathryn’s written rejection agreeing that it applied to replacement policies was of no effect because the statute only provided that such a written rejection applied to a renewal policy.
The court in making it’s ruling stated that by using the term “renewal policy” in the statute, the legislature intended the term to include a new contract between parties that replaces a preceding policy without a lapse of coverage. In discussing further, the
Court stated there is no authority for an assertion that a renewal policy must have identical parties and terms as the earlier policy.
In it’s closing statement the court said, “We hold that under these facts, the Mid-Century policy was a renewal policy. Thus, Mid-Century was not required to provide PIP in its policy because Kathryn rejected the coverage in writing in connection with the issuance of the Farmer’s policy, and a policy previously issued to her by an affiliated insurer.”
There is a lot of case law dealing with the PIP statutes and there have been some revisions and new interpretations of these laws. An experienced Insurance Law Attorney would be up to date on these laws and the changes in the laws. He would be able to give proper advice for most disputes arising under these laws.