The Elephant in the Room: PIP

Insurance companies will do whatever it takes to delay, diminish and defend against your car accident claim.  Sometimes, they will even try to ignore the law.

Recently, our office negotiated a settlement for an automobile accident case.  After our office countered the initial offer, the adjuster pointed out the “elephant in the room:” the fact that our client had PIP insurance and their medical bills were paid.  Basically, the adjuster was arguing that since our client maintained PIP on their policy, they were recovering twice for their medical bills.

Here’s how it works.  If a person is injured due to a car accident, but their medical bills are paid by PIP the person may still make a claim for medical bills against the at-faul driver even though the bills were covered by their PIP.  In so doing, the plaintiff’s medical bills are actually paid, but the plaintiff gets to claim them as unpaid for settlement purposes with the at-fault driver’s insurance.

The insurance companies consider this double dipping, but it’s perfectly legal in Maryland.  Here’s, why.

What is the collateral source rule?

In Maryland, the collateral source rule permits an injured person to recover the full amount of their medical bills, regardless of the amount of compensation which the person has received for their injuries from sources unrelated to the at-fault driver, like PIP.

The collateral source rule rests on two basic public policy concepts.  First, the at-fault driver should not receive a windfall because the plaintiff received a benefit from an independent source, like PIP.  Secondly, the rule encourages people to maintain full coverage on their automobile insurance.

While the rule is often discussed in the context of health insurance benefits, the rule is not limited to such benefits.

For example, if a plaintiff misses work due to an automobile accident, but receives sick pay, then the plaintiff may still claim lost wages even though the wages were covered by their sick pay. Here, the plaintiff recovers not only their sick pay but also the lost wages from the at-fault driver.

So, back to our client and the “elephant in the room.”  Our office reminded the insurance adjuster of the collateral source rule.  We also pointed out that if the situation was reversed and our client didn’t have PIP coverage, then the adjuster wouldn’t be offering us an extra $2,500.00 to make up for the fact that our client didn’t have PIP.

In the end, our office was able to reach a fair and reasonable settlement with the insurance company.  Had our client not had an attorney, then they may have been persuaded to take a lower settlement by the “elephant in the room.”

Schedule a free consultation to review your personal injury case

Albers & Associates has years of experience resolving Maryland personal injury cases. We represent those who have been injured by someone else’s negligence and whose personal injuries have caused them physical pain, stress, medical bills, and other damages. We care about the future of our clients and work hard to see that each of them receives the most positive outcome in their personal injury case.

Our fee is contingent on there being a recovery in your case.

Call (443) 665-8030 to schedule a free consultation. Weekend appointments are available.