Personal Injury Protection (PIP) – How Does It Work?

Grand Prairie residents and residents of Dallas, Fort Worth, Duncanville, Crowley, Irving, Arlington, Mansfield, Mineral Wells, and all the other locations in Texas are covered by the same insurance laws. The laws may be different in other states but policies issued in Texas, no matter where in Texas, all have the same laws apply.
Personal Injury Protection (PIP) benefits cost quite a bit extra on an automobile policy. Because of the extra expense the vast majority of persons who have auto insurance make the choice to not purchase PIP.
But for those who do purchase PIP, most do not really understand how it works. Here is a little information to help in understanding PIP.
To begin with, PIP is required coverage in Texas unless the person purchasing the automobile insurance specifically rejects the coverage in writing. This is specified in the Texas Insurance Code, Section 1952.152. The normal occurrance here is that when someone is dealing with their insurance agent and discussing the coverage they are going to pay for and the price the various forms of coverage are going to cost a decision is made as to whether or not to pay for PIP. As stated earlier, most people opt to not have PIP. At this point the agent has a preprinted form that is usually part of the application of insurance that says the applicant is rejecting the coverage. The applicant is asked to sign the form and thus they are now rejecting the coverage in writing. Most people will not specifically remember doing this because they are usually signing the application in three to four or maybe five or six different places.
The minimum amount of PIP coverage is $2,500 per Section 1952.153, Texas Insurance Code. The coverage amounts can go to $50,000 and with some companies to $100,000.
PIP pays for reasonable and necessary medical expenses that arise out of an accident involving an automobile. It also pays a percentage of lost income that arises out of an accident involving an automobile. See Section 1952.151.
Here is one of the unique features of PIP coverage:
Texas Insurance Code, Section 1952.155, says this benefit is payable without regard to who is at fault for causing the injury. This same section says that PIP is payable without regard to other sources of payment the injured person may be receiving or entitled to. This essentially allows a “double recovery” if the injured person also has his losses paid for by another source such as health insurance. This is probably the only place in Texas insurance law where this possible result is allowed. It is also one of the reasons PIP is a more expensive insurance. Plus it is not subject to subrogation laws.
However, Section 1952.159, tells us that if a liability claim is made by a guest or passenger against the owner or operator of an automobile in which the guest or passenger is riding that the auto insurance carrier for the owner or operator is entitled to an offset against the liability portion of the insurance policy to the extent any PIP benefits are paid. The limitation on this offset does not apply when the claimants losses exceed the liability portion of the policy.
The way PIP works is not really very complicated except to the extent it is something most people never find themselves having to deal with it. An experienced Insurance Lawyer would not have much problem explaining the parts that may be confusing. It is a portion of an auto insurance policy that many people do not even realize they are entitled to benefits from. In reality most people who have PIP and are paying substantial premiums for it do not even realize they have it. And the people who know they have this benefit are often times reluctant to make a claim for the benefits, apparently believing they cannot recover the benefits or, are afraid it will make their own insurance rates increase.