Personal Injury Protection vs. Bodily Injury Liability

Like a handful of other states in the nation, Florida is a no-fault state. The term is misleading, as it does not mean that no one is at fault for car accidents in Florida. It means that Florida drivers must carry a personal injury protection policy.

When an accident occurs, that policy is usually the driver’s first resource for compensation if they or their passengers are injured, regardless of who was at fault for the accident. Here is a look at personal injury protection, bodily injury liability, and the differences between the two.

Personal Injury Protection

Personal injury protection (PIP) policies were created in the 1970s in response to public and industry criticism of the traditional auto liability system that was spending far too much time and resources on determining fault after an accident. Several states passed laws that allowed individuals injured in accidents to seek compensation for medical expenses and wage loss they incurred due to their injury.

The majority of states still use a tort system. In these systems, personal injury claimants must seek compensation for their injury expenses through the at-fault party’s bodily injury liability policy. However, several no-fault states and a few states have adopted a hybrid system where the driver can choose whether to purchase a personal injury protection policy.

How Personal Injury Protection Works?

Each state’s personal injury protection coverage requirements are slightly different. In Florida, drivers who wish to register any four-wheeled vehicle must have personal injury protection coverage and a property damage liability policy. Each of these policies must provide at least $10,000 in coverage.

The PIP policy will pay 80 percent of medical bills incurred due to injuries sustained in a car accident, up to the policy’s limit, provided the treatment is deemed reasonable by the insurer. The types of expenses covered by PIP include emergency treatment, medical treatment at the hospital or through a private physician, medication, hospital expenses, the cost of surgery, diagnostic imaging, and bloodwork. They rarely cover experimental and non-traditional treatments. If the injury is not emergent, PIP claimants receive a flat payment of $2,500 for the treatment of the injury.

The policy also pays up to 60 percent of wage loss (up to the policy’s limits) if the claimant is too injured to work due to the accident. Additionally, suppose the claimant’s injury temporarily prevents them from performing household duties such as cleaning, laundry, or yard work. In that case, the PIP policy will pay for the cost of hiring someone to perform those services for them.

PIP policies in Florida and some other states also provide a death benefit. This benefit pays for a funeral and burial or cremation expenses if the policyholder or their household member died in a traffic accident. In Florida, this benefit is $5,000.

PIP policies cover the named policyholder and their household members, and even passengers injured while riding in their car and do not have a PIP policy to seek compensation from. The coverage also extends to injuries incurred while the policyholder or others in the household were a pedestrian or riding a bicycle. However, PIP coverage does not extend to motorcyclists, and they are not required to obtain this type of insurance.

What Is Not Covered by PIP?

PIP policies do not cover these expenses:

• Damage to your vehicle
• Medical expenses exceeding the limit of the policy
• Non-economic damages, such as pain and suffering or emotional distress

The Benefits of PIP Policies

The original intention of the requirement of PIP policies was to relieve the burden placed on the civil court system resulting from car accident lawsuits. It also provides those injured in accidents with the ability to seek compensation from their provider, regardless of fault, rather than determining who was at fault and seeking compensation through that individual’s auto liability insurance policy.

Claimants injured by uninsured or underinsured drivers have can rely on their PIP policies as another source of compensation. A study conducted by the Insurance Research Council found that Florida is one of the states with the highest rate of uninsured drivers, with approximately one in every five drivers on the state’s roadways being uninsured.

The Problems with PIP

Despite its benefits, PIP policies have a downside as well. The $10,000 minimum policy limit required by Florida is often not enough to fully compensate for the expenses of the injury, even if it isn’t serious. Those with serious injuries—or ones that are particularly costly to treat—are often left with the uncompensated expense and must still determine fault to file a personal injury claim.

Additionally, PIP policies do not provide compensation for expenses such as lost future earning capacity, property damage, and impacts such as physical pain and suffering or emotional distress. These items are all compensable through the personal injury claims process and can result in a far higher award than what a claimant can obtain through PIP coverage.

The costs related to obtaining the required minimum levels of insurance can be higher in no-fault insurance states, pushing many people to decide to drive without insurance. For example, insurance in Florida costs about 36 percent more than the national average.

Finally, many individuals injured due to someone else’s negligence feel that there is no accountability for the at-fault party for causing the accident because PIP coverage is available regardless of fault.

What Happens If the Injury Costs Exceed the Limits of Your PIP Policy?

In some states, if the injury costs exceed the limits of the PIP policy, the claimant is on the hook for additional expenses. In Florida, claimants whose injury-related expenses exceed the claim or who meet the state’s serious injury threshold can seek compensation through the personal injury claims process.

The serious injury threshold includes injuries that result in:

• Significant and permanent loss of bodily functions.
• Permanent injury, within a reasonable degree of medical probability.
• Significant and permanent scarring or disfigurement.
• Death.

Can Insurance Companies Deny My PIP Claim?

Yes. Insurers can deny your PIP claim if:

• You failed to pay your insurance premiums, resulting in a loss of coverage.
• You failed to obtain medical treatment within 14 days following the accident.
• You obtained a non-traditional treatment or obtained treatment from an unlicensed physician or medical facility.
• The insurance company says your claim is fraudulent or a car accident did not cause your injuries.
• You were under the influence of alcohol or drugs when the accident occurred, you were committing a felony when the accident occurred, or the insurance company believes that you intentionally caused the accident.

Which States Require a Personal Injury Protection Policy?

In addition to Florida, other states that require a personal injury protection policy include Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Utah, and the U.S. territory of Puerto Rico. Each state’s requirements are slightly different. Claimants from those states should speak with an experienced personal injury attorney to learn more about how their no-fault insurance laws impact their ability to file a claim.

Bodily Injury Liability

Bodily injury liability compensates others for expenses and impacts of an injury incurred due to the insured’s carelessness or recklessness. This type of coverage is only available to others injured by the insured but is not available for the insured or their passengers.

States without no-fault systems require this insurance coverage. It helps the insured avoid out-of-pocket costs for automobile accidents.

In tort states (where no-fault insurance is not required), individuals injured in accidents caused by someone else’s negligence can seek compensation through the personal injury claims process.

In a nutshell, this process involves:

• Determining who caused the accident and the insurance resources to compensate those who suffered an injury due to their negligence.
• Determining the value of the claim. The claim’s value is based on the amount of insurance the at-fault party has, the severity of the injury suffered, the actual expenses incurred in the treatment of the injury, wage loss, the repair of property damage that the claimant incurred, and the presence of permanent injuries that will affect a person’s ability to earn an income. Additionally, non-economic damages reflect the psychological impacts of the injury and its effects on the sufferer’s life.
• Demanding the value of the claim from the at-fault party’s insurer. The insurer can either pay the claim, deny the claim, or offer an out-of-court settlement for less than the claim’s stated value.
• Negotiating a settlement that fairly compensates the claimant for the expenses and impacts of their injury.
• In lieu of full payment of the claim or a fair settlement, filing a lawsuit within the state’s statute of limitations.
• If the case has not settled by the trial date, litigation of the case in court.
• Collection of compensation demanded, ordered, or agreed upon through a negotiated settlement.

The Benefits of Bodily Injury Liability

The benefits of bodily injury liability versus personal injury protection include:

• An expanded list of items you can seek compensation for, including loss of future earning capacity, property damage, pain and suffering, and emotional distress.
• Personal injury claims generally result in higher awards and negotiated settlements due to not having the low policy limit and—in some states such as Florida—only partial coverage for wage loss and medical expenses.
• The ability to hold individuals accountable for the reckless or careless actions that resulted in an accident.

The Problems With Bodily Injury Liability

A negotiated settlement resolves the vast majority of personal injury claims. However, a few of these claims go to court, where they are subject to delays from court scheduling, formalities involved in the legal process, expense, and an uncertain outcome.

The process revolves around the ability to produce evidence and witness testimony to prove liability, rather than simply filing a claim against a personal injury protection policy, which does not require you to prove fault.

Additionally, bodily injury liability policies also have policy limits. Individuals can face uncovered costs without the addition of a PIP policy.

Some Cases Involve Both a PIP Claim and a Personal Injury Claim

As explained above, PIP policies never fully compensate for medical care expenses and wage loss, and it is not unusual to reach the policy limit rather quickly when a serious injury is involved. If the injury meets the state’s serious injury threshold, the claimant is permitted to bypass the PIP claims process and begin the personal injury claims process. However, PIP insurance often provides even those seriously injured with quick access to compensation while they start the personal injury claims process.

Did a car accident injure you? Let an auto justice attorney’s legal team provide answers to your legal questions. Contact a car accident attorney today to get started.

Hire an Experienced Orlando Auto Accident Lawyer

If you or a loved one have been involved in a car accident and you do not think your personal injury protection coverage will fully compensate you, it’s important to contact an experienced Orlando Auto Accident Lawyer to help you file a lawsuit. We can help you obtain compensation for medical bills, future medical treatment, loss of wages, pain and suffering, etc. Feel free to fill out our quick contact form on our website to discuss your legal options in greater detail.

Michael T. Gibson P.A.

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