Why do I have to pay back my own insurer?

Many of my clients have personal injury protection (PIP) coverage through their auto insurance. This coverage acts like health insurance without the same restrictions (no co-pays or deductibles, no referrals required, no networks to worry about). If you are injured in an auto accident and you have PIP coverage, you can see any health care provider you want and the insurance has to pay as long as the treatment is reasonable, medically necessary and accident related. This is a great advantage when you have been injured.

Check your auto policy now! If you don't already have PIP coverage, call your insurer and get it immediately. This coverage doesn't cost very much and you'll be glad you have it if you are hurt in an accident. While you are on the phone with your insurer make sure you have Uninsured Motorist Coverage (UIM) as well. I'll discuss UIM coverage in another entry, but believe me - you want it.

After you finish your treatment, if you never make a claim against the other driver, you never have to pay back your PIP insurance. However, if you do make a recovery, your PIP insurer is entitled to get paid back. This right is called subrogation.

In the past, your PIP insurer could recover 100% of what it paid for your medical expenses, even though you may have incurred substantial expenses for legal fees and costs. However, in a series of landmark decisions over 10 years old, the Washington Supreme Court ruled that if your insurance company benefits from the lawyer's work, then it should pay its fair share of the attorney's fee and costs. To read more about these landmark decisions, see the following article:

http://www.appeal-law.com/articles/mahler.html

How it works now is simple. Let's say your PIP insurance pays $10,000 toward your medical bills and you settle your claim against the other driver. In the past, you would have had to pay $10,000 out of your settlement to your own insurance company. Under the new law, if you have an attorney, you can deduct a one-third fee as well as the insurance company's share of costs advanced from the $10,000 resulting in a payment to the insurance company of less than $6,666.67. This puts an extra $3,333.33+ in your pocket.

Insurance companies don't tell you that if you try to settle without an attorney, you are still responsible to pay back your PIP insurer 100% of what they paid.

Of course, if you exhaust the available insurance limits, there is no obligation to pay back your PIP carrier at all. This is based on a presumption that you have not been "fully compensated" (as if any injured person is ever "fully compensated" by receiving some money).

For more information about PIP coverage, subrogation and the Mahler decision, please check out my website or send me an email: matt@dubinlawoffice.com