What Does PIP Cover And Not Cover?

Insurance lawyers in the Dallas and Fort Worth area need an understanding as to what Personal Injury Protection (PIP) benefits cover and do not cover.

PIP consists of reasonable expenses incurred for necessary medical and funeral services as well as replacement of 80% of income lost during the period of disability up to the amount of PIP policy limits.  To receive the lost income benefits, the covered person must have been an income producer in an occupational status at the time of the accident.  When an insured had not yet reported to a summer job that was to start two days after the accident and had not yet earned any wages, the court upheld a jury verdict that the insured was not an income producer.  This was the result in the Houston Court of Appeals [1st Dist.] 1981, opinion styled, Slocum v. United Pacific Insurance Co.  The court did point out that “one does not have to be at work at the time of the accident to be in an occupational status.”  Thus, one simply needs to commence earning income before the accident to be considered an income producer in an occupational status.

If the covered person was not employed, PIP benefits include expenses incurred for obtaining services that the covered person would have performed had they not been injured.  If should be noted that the covered person must make an election as to whether he or she wishes to recover for lost income or the costs incurred in obtaining substitute services.  He or she cannot recover both.

The PIP coverage contains far fewer exclusions than found under the med pay or liability coverages.  For example, there is no exclusion relating to employment or worker’s compensation, therefore, PIP is payable in addition to worker’s compensation benefits.  Vehicles furnished or available for the insured’s regular use are not excluded, and thus PIP benefits are payable for accidents in a company car.  The lack of exclusions is in keeping with the spirit of the PIP statute, which provides in Texas Insurance Code, Section 1952.155, that PIP benefits “shall be payable without regard to any collateral source of medical, hospital, or wage continuation benefits.”  Thus, a covered person may collect the maximum possible PIP benefits under their auto policy and also collect the same expenses and benefits against a third-party tortfeasor.