Personal injury protection (PIP) coverage is a first-party coverage. Every policy in Washington has PIP unless the insurance company obtained a written, signed waiver of coverage. PIP covers (1) persons named in the policy, (2) minor family members of the household, (3) passengers in an insured vehicle, and (4) pedestrians that are struck by an insured vehicle. PIP benefits are payable regardless of whom was at fault for causing the collision. PIP covers four things:
PIP covers medical bills incurred within three years of the date of the collision that are (1) reasonable in amount, (2) medically necessary, and (3) causally related to the collision. Most policies have a policy limit of $10,000.00, but some policies have more coverage. Payments are made to health care providers as bills are received.
PIP has very limited wage loss coverage. It pays a percentage of lost wages up to a weekly cap. The first 14 days after the collision are excluded from coverage. Then PIP pays wage loss incurred within the next 52 weeks.
PIP has very limited coverage for essential services. Essential services include expenses like having someone mow your yard or clean your home if your injuries made these activities impossible for you to perform yourself. This coverage is usually limited to $10.00 per day and $50.00 per week.
PIP has limited funeral benefits.
If your insurance pays PIP benefits and the other driver was at fault, then it will assert a right of reimbursement in the amount that it paid against the proceeds from any recovery from the other driver. There are three important legal rules related to subrogation.
First, under a case called Thiringer, the injured persons must be made whole by all recovery from all sources before the injured person has to start paying back insurance companies (reimbursement). For example, assume that a person was injured in an amount of $60,000.00 (leaving aside for the moment how we arrive at this figure) if you consider their medical bills, wage loss, pain, suffering, inconvenience, disability, loss of activity, loss of enjoyment of life, disfigurement, and other losses. If the PIP paid $10,000.00 in medical bills, the PIP paid $5,000.00 in lost wages, health insurance paid $5,000.00 in medical bills, and third party liability paid $50,000.00 (for a total from all sources of $70,000.00), then the most that could be subject to reimbursement is $10,000.00. Thus, the injured person is not entitled to recover more than his or her full damages. The excess or double payments are subject to reimbursement.
Second, under three cases called Mahler, Winters, and Hamm, because you had to hire a lawyer and incur attorneys fees to collect the money that is being used to repay your PIP carrier, your PIP carrier must pick up a pro rata share of the fees and costs incurred in obtaining the recovery. For example, if (1) your PIP carrier paid $5,000.00 in benefits, (2) you settled your case with the liable party for $15,000.00, (3) your attorneys fees were $5,000.00, and (4) your costs were $1,000.00, then your PIP carrier would have to pick up its share ($5,000 divided by $15,000 or 1/3) of the attorneys fees and costs ($6,000). Thus, it would reduce its interest by $2,000. You would have to repay them, at most, $3,000.00.
Third, under a case called Sherry, if you are partially at fault for causing the collision, and the other driver is partially at fault for causing the collision, you are entitled to be fully compensate for all your damages before PIP gets repaid. For example, if liability is 50% to you and 50% to the other driver, and your total damages are $20,000.00, then you are legally entitled to collect $10,000.00 from the other driver. If PIP paid $10,000.00 and you recover $10,000.00 from the other driver, you do not have to repay PIP since you collected no more than your total damages.
