Personal Injury Protection (PIP)

March 28, 2013

Dallas insurance lawyers need to understand how Personal Injury Protection (PIP) benefits work in an auto policy.
The Texas Insurance Code, Section 1952.152, tells us that PIP is required coverage in an auto policy unless this coverage is rejected in writing. However, Section 1952.153, tells us that the minimum requirement is only $2,500.
Most people end up rejecting this coverage. For those who opt to get the coverage, most get only the $2,500 minimum. The most this author has seen on a policy is $100,000. Even though that has only been seen once, amounts of $5,000 to $10,000 occur, but rarely will the amount be greater than $25,000.
So now, how is that money recovered?
The insurance policy for PIP coverage will provide that the company will pay PIP benefits because of "bodily injury resulting from a motor vehicle accident and sustained by a covered person."
There have many lawsuits over when the PIP coverage is payable. Here are a few examples of the lawsuits:
1) A 1980, case where the claimant was injured while tripping over a curb four steps away while exiting an auto was denied by the court wherein they said the accident did not constitute a motor vehicle accident.
2) A 2004, Texas Supreme Court case contrasts with the above where a person was exiting his vehicle and became entangled with the door and was injured. The court found a casual connection between the vehicle's use and the injury producing event and thus said coverage existed.
3) A 1996, Houston Court of Appeals, [1st Dist.] case where the court denied coverage where the injuries resulting from a drive by shooting while the victim was sitting in the covered vehicle. The court said this did not constitute a "motor vehicle accident."
4) Another 1996, Houston Court of Appeals, [1st Dist.] case where the insured was ordered out of his vehicle by his passenger and then shot. Again, the court said this did not constitute a "motor vehicle accident."
5) Another court found there was coverage where a shooting was involved. In that case a child was climbing through the rear window of a pickup truck, causing a gun to go off that was in the truck. As in (2) above, the court found a casual connection between the vehicle's use and the injury producing event and thus said coverage existed.
According to Texas Insurance Code, Section 1952.155, PIP is a coverage that is payable without regard to the fault or nonfault of the named insured or recipient in causing or contributing to the accident and without regard to any collateral source of medical, hospital, or wage continuation benefits. - What this essentially allows, is a double recovery in many situations. For instance if a person has health insurance or is some other type of benefit that covers his medical bills and or lost wages, PIP benefits are still payable - thus the double recovery.
The Texas Insurance Code provides for substantial penalties in Section 1952.157 for an insurance company's failure to timely pay PIP benefits. These penalties provide for recovery of a 12% penalty, attorney fees, plus the recoveries available under other parts of the Texas Insurance Code, which call for an additional 18% penalty and up to a trebling of damages in some situations. This means that an experienced Insurance Law Attorney should be consulted whenever the company refuses or delays in making benefit payments under a PIP claim.