PIP coverage is comparable to Medical Payments Coverage in a Texas Insurance Policy in that both are no-fault and pay for similar expenses. The difference between the two is this: Medical Payments Coverage only pays for reasonable and necessary medical expenses. PIP pays for that and up to 80% of lost wages, both to a maximum of whatever the amount of coverage is that has been purchased. Their similarity is that both are nofault coverages.
Texas Insurance Code, Article 5.063(b) sets up PIP coverage as a quick source (payable with 30 days of providing the information needed to pay the claim) of funds for an insured accident victim when the losses are for medical expenses or lost wages. The legal minimum is $2500, but much higher amounts can be purchased. The highest this writer has seen by an individual is $50,000.
PIP coverage exists in every automobile policy automaticly, unless rejected in writing by each insured. This is firmly established in Texas law in the cases, Ortiz v. State Farm Mutual Automobile Co., and Old American v. Sanchez.
As stated earlier, PIP pays for two types of losses; 1) reasonable and necessary medical expenses, (and funeral), and, 2) 80% of a covered persons’ loss of income from employment. This benefit applies only if, at the time of the accident, the covered person, a) was an income producer, and b) was in an occupational status.
Lost wages under PIP benefits is not usually challenged by an insurance company as long as if can be verified and that is usually easy to do through an employer. However, it is challenged routinely when the claimant is self-employed or someone who is paid on a commission basis.
PIP claims for reasonable and necessary medical benefits are challenged routinely except when the bills are emergency room related. After the E/R care, at a physical therapist or chiroprator is often challenged by the insurance company as not being necessary. And the charges from these, after the E/R providers, are also challenged. Seems kinda reversed considering how high these charges are compared with the E/R.
Lawsuits from a denial of PIP benefits are common. Whenever it happens, the advise of an experienced Insurance Law Attorney will usually get the benefits paid, plus court costs, plus attorneys fees.