June 11th, 2018|
Victims matter. You may have heard or seen a version of this statement many times, given the apparent unrest and violent eruptions in many communities throughout the nation. Some may feel that this phrase (or a variation thereof) is probably a little overused and not always uttered with clarity or sincerity. However, that does not diminish its truth: victims do matter. Many of you, or at least people you know, have had the most unfortunate experience of being immobilized and victimized by a random stranger’s inept driving and recklessness. You do not have to feel powerless as you sit in shock, and maybe in pain, on the side of the road. Ponder this advice and let it embolden you and your loved ones if, or more likely when, you are put in that horrible predicament.
After being victimized by a car crash, what you do thereafter also matters. You can increase the capacity for physical and emotional healing, as well as reasonable compensation for this potentially life-changing event, notwithstanding the miserable harms and losses. The answer to how this can be accomplished may surprise you: so long as you are able to safely do so, get the police involved. If this seems underwhelming from previous police encounters, let us explore exactly how you can obtain useful information that can be decisive in future negotiations and/or litigation, if necessary.
Most will probably concede that in personal or critical injury and fatal crashes, the resources and investigation tactics employed by law enforcement officers are indispensable. However, even in collisions where there is no obvious trauma, only minor apparent property damage, in the event of a hit-and-run or in other roadside public disturbances, law enforcement officers can still render invaluable assistance and make additional determinations about commencing investigations that can prove vital as you are attempting to recover from the wreckage.
A responding law enforcement officer can help identify non-obvious safety hazards or additional threats to your personal safety. Witness identification, evidence preservation, traffic restoration, and property protection are further benefits of police involvement.
Regardless of the magnitude of the crash, Law enforcement officers have a duty to respond when called. Even in the event of no visible injury and when no official report will be issued, an officer can assist the involved parties with exchanging information. People can seem unapproachable or intimidating, especially when emotions are high after a collision. If it is safe, remain in your car and wait for the authorities to respond to facilitate the exchange. Parties should exchange driver’s licenses, vehicle registration, and insurance information. The responding officer should run a record check of all licenses and vehicle registrations, even when they appear to be valid. This can protect you against fraud. If the information presented cannot be verified or if additional issues or violations exist, the officer should issue applicable citations or supplemental reports.
In addition to verifying the identity and possibly charging the person who hit you, an officer can generate a report that objectively documents the date, time, location of the incident and comprehensive information regarding the cars and parties involved. In most cases, the weather, lighting and roadway conditions will be noted along with collision diagrams and pictures. Officers can obtain statements from the parties and examine the vehicles, assigning fault and registering contributing factors such as evidence of speeding, broken brake lights and missing signals. This can protect you against future false allegations that may attempt to shift any fault to you.
In every case in which a law enforcement officer responds to an incident, a Complaint Control Number (CCN) or case reference number will be assigned. Interested parties can then follow up with the local police station or barracks to acquire or make any related reports.
While the officer is running reports and gathering information, take a few moments to catch your breath. After a crash, your body may be in a bit of shock. Try to listen to your body; if something does not feel right, do not ignore it. Do not feel shamed about requesting medical attention when an injury may not be completely obvious. You may find that most law enforcement officers define “personal injury” as an injury that is observable or evident or for which a person is transported by ambulance. Police may totally discount only complaints of pain or discomfort without the request for hospital transport. Your health and safety are precious. Let a medical professional expertly assess any trauma. Even if you do not believe you need to be transported to a hospital, try not to needlessly move about the scene. Your body may have a delayed reaction to the impact as adrenaline can mask injury symptoms. Make sure you do not ignore any dizziness or pains. Get the treatment you need right away. Having a professional diagnose your injuries and correlate them with the motor vehicle collision can not only get you started on the path to physical recovery sooner, but it can also strengthen your credibility and secure the records needed for any future claims. Additionally, feelings of anxiety after a car crash can also be an unfortunate common occurrence. There are many ways you can work through those feelings with professional care, personal attention and time. Do not be afraid to explore your resources.
Take the opportunity to ask the responding officer questions. You may need to follow up by making your own report at the station. If new information is uncovered after a collision, a law enforcement officer will not likely have to produce a new or updated report. However, this is something that you can accomplish to preserve the record and chronicle all relevant happenings.
If you are ever the unfortunate victim of a hit-and-run, be sure to alert your local law enforcement agency right away. An officer will not be dispatched to investigate crashes that occurred on, or were discovered on, a previous date. When you delay in contacting law enforcement, you effectively diminish the chances of obtaining valuable evidence, rendering police investigation essentially moot. Again, when police arrive to investigate after a crash has occurred, and the scene has been stabilized as much as possible, their examination of the facts determines what happens next and whether an official report or additional resources are needed. To effectively develop investigative leads, the timing has to be just right to identify and interview potential witnesses and drivers, make observations of other vehicles near the scene close to the time of the occurrence, recover physical evidence that can properly be identified as being left contemporaneously to the incident and register as many details as possible while they are still fresh in your memory.
Law enforcement officers handling a hit-and-run can be expected to make all efforts to identify the striking vehicle and the vehicle’s driver. When the description of a suspect or suspect’s vehicle is available, it will likely be broadcasted from the scene. If the victim is able to record a tag or partial tag number that allows police to identify an owner, a report should document the subsequent contact with that person and record any explanations or relevant statements offered. Most law enforcement officers will have the authority to make a full custody arrest of a hit-and-run suspect, although other permissible procedures can include the issuance of citations or application for a warrant.
For a hit-and-run that has occurred on an earlier date, you may still file a report, but will need to contact your local law enforcement agency to determine the correct forms and processes.
Additional Situations That Factor Into Police Reports
As suggested before, Law enforcement officers are not required to generate an official report for every collision. In a single- or multi-vehicle property damage crash where the vehicles may or may not be disabled but are not on public property, an official report may be optional. Crashes on public roadways not resulting in disabling damage to any vehicle or not causing an impediment to the roadway may also not yield an official report. Nevertheless, you can still expect officers to follow proper procedure by ascertaining the possession and validity of drivers’ licenses, checking vehicle registrations and VIN plates against registration documents and plates and determining the wanted status of drivers or vehicles. In the event of a discrepancy, it should also be expected that the officer will then issue an official report.
Law enforcement officers are not totally infallible and the reports they generate may occasionally contain mistakes, mischaracterizations or important omissions. Law enforcement officers are primarily tasked with public safety concerns, civil infractions and criminal violations, and they may appear reluctant to get involved in determining civil liability. Try not to fret, as you can overcome these challenges as well. If an officer fails to attribute fault to the person who hit you, many times there is other evidence of contributing factors or even partial statements that can identify the negligent party. Insurance companies will often conduct their own investigation into what happened, especially if you are contesting what has been recorded. The evidence your insurance company uncovers can be sufficient to corroborate your recitation of the occurrence.
More often than not, reports of Law enforcement officers may be deemed inadmissible hearsay in civil proceedings. Accordingly, photographs of property damage and the scene of the crash, as well as repair estimates, medical records and testimony, can fortify your case. Notwithstanding any police error, with the assistance of competent counsel, you can attain a settlement or judgment that adequately endeavors to compensate you for all that has been lost.
In many cases, the law does not require you to contact the police. However, even when you do not make the call yourself, someone else does and an officer may arrive at the scene of your collision. The law enforcement officer has responded to ascertain if medical attention is required, to conduct an investigation into the occurrence and to prevent further disruption to the public or traffic. Naturally, one of the first things a responding officer will do is make contact with the drivers and attempt to discover what actually took place. There is no law that requires motorists to answer every question posed by an officer. However, being nonresponsive or rude is not appropriate either and will not prove helpful. For the most part, if an officer asks for your license, registration, and insurance information, you should comply with this request. If you fail to comply, you may then be issued citations or may be arrested.
When you are the regrettable victim of a car collision, there should be nothing to fear in dialoguing with the responding officer, especially if the other driver is quite obviously at fault and you have not done anything wrong. However, if for whatever reason you do not wish to speak with an officer, try to be polite and advise them that you do not feel comfortable answering any additional questions or that you would like the opportunity to first consult with an attorney. If an officer is generating a report, any statements you make can be recorded or noted as part of the investigation. What you say is important, and you should be afforded the opportunity to collect your thoughts or reserve your right to make an official report at a later time.
In conclusion, when someone else makes the decision to talk on his or her cellphone, run a red light or reach down for a coffee and crash into you, you have been victimized. Take time to assess your body and check on any passengers. If you can safely make a call, reach out to law enforcement. Regardless of how major or minor you feel the collision is, the assistance, verifications, evidence preservation, traffic restoration and reports that an officer can provide can empower you, changing you from a victim to a survivor, and from a survivor to a vanquisher.
February 26th, 2018|
A third party bad faith claim arises when an injured person obtains a judgment against a negligent driver that exceeds the negligent driver’s liability insurance limits (i.e., an “excess verdict”).
- Driver A runs a red light and crashes into Driver B.
- Driver A has a GEICO insurance policy with $100,000 in liability coverage.
- Driver B files a lawsuit for his injuries.
- Driver B offers to settle his case for the policy limits, but GEICO refuses.
- Driver B obtains a jury verdict for $150,000.
- GEICO pays the $100,000 under the policy.
- Driver A personally owes Driver B the excess $50,000.
Driver A has a bad faith claim against his own insurance company because GEICO failed to negotiate and settle the case within the policy limits of $100,000. GEICO did not have their customer’s best interests at heart when they gambled at trial in an attempt to save money. As a result, Driver A is personally responsible for the excess verdict and may have his wages garnished or assets seized. Driver A can assign the right to pursue the $50,000 bad faith claim back to Driver B in exchange for an agreement to not pursue his personal assets. The assignment procedure is outlined in Medical Mut. Liab. Ins. v. Evans, 330 Md. 1 (1993).
Test for Bad Faith
An excess verdict alone does not establish bad faith. The Maryland Court of Appeals has established the following 6-factor test to help determine whether an insurance company has acted in bad faith towards their insured:
- The severity of the plaintiff’s injuries indicates the likelihood of a verdict greatly in excess of the policy limits.
- Lack of proper and adequate investigation of the circumstances surrounding the accident.
- Lack of skillful evaluation of plaintiff’s disability.
- Failure of the insurer to inform the insured of a compromise offer within or near policy limits.
- Pressure on the insured to make a contribution to settlement within policy limits, as inducement to settle.
- Actions which demonstrate a greater concern for the insurer’s monetary interests than the financial risk to the insured.
State Farm v. White, 248 Md. 324 (1967); Allstate v. Campbell, 334 Md. 381 (1994).
Additionally, the insurance company has a duty to keep their insured fully informed on the progress of the claim. Schlossberg v. Epstein, 73 Md. App. 415 (1988). The insured also has the right to hire their own counsel outside of the insurance company’s lawyers due to the conflict of interest. Finally, the bad faith claim arises in tort and not contract. Kremen v. Maryland Automobile Insurance Fund, 363 Md. 663, 674 (2001).
What’s the value of the bad faith claim?
Once the bad faith claim is established, the measure of damages is the difference between the liability policy limits and the verdict. Medical Mut. Liab. Ins. v. Evans, 330 Md. 1, 25 (1993). So, going back to example #1, the value of that bad faith claim is $50,000. The insured or their assignee cannot collect additional damages for emotional distress or punitive damages unless they can demonstrate “actual malice” on the part of the insurance company. Owens-Illinois v. Zenobia, 325 Md. 420 (1992).
The bad faith claim is subject to the collateral source rule and is NOT reduced by payments from the uninsured or underinsured motorist insurance (UIM) carrier.
- Driver A strikes Driver B.
- Driver A has liability coverage of $30,000.
- Driver B has UIM coverage of $50,000.
- Driver B obtains a jury verdict for $75,000
The value of this bad faith claim is $45,000 (the difference between the verdict and liability coverage). The liability carrier does not get a credit for payments made under UIM. See Kremen at 675. So here, Driver B may collect a total of $95,000 ($30,000 liability, $20,000 UIM, $45,000 bad faith).
Bad Faith Survives
Bankruptcy does not extinguish a third party bad faith claim. If a negligent driver incurs an excess verdict and files for bankruptcy, his debts are discharged. The defendant may not have to pay the excess verdict, but the bad faith claim against the insurance company survives. Kremen v. Maryland Automobile Insurance Fund, 363 Md. 663 (2001).
As of the time of this article, the Maryland courts have not addressed whether the death of a negligent driver extinguishes the bad faith claim. The issue was raised in Mesmer v. Maryland Automobile Insurance Fund; however, the Court decided the case on other grounds. 353 Md. 241 (1999).
What Actually Happens
In practice, ChasenBoscolo has obtained many verdicts in excess of the negligent driver’s policy limits, and the insurance companies have always paid the excess. In fact, many insurance companies tell their negligent drivers, “Don’t worry. We’ll pay the verdict. No matter what.” State Farm ironically calls this their “good neighbor” policy.
Why does bad faith matter if the carriers pay the excess verdict?
The potential for a bad faith claim creates benefits for the injured person beyond the simple satisfaction of sticking it to the insurance company and their lawyers.
Initially, it is important to understand the motivation. The insurance companies and their adjusters evaluate each claim and set aside money from their other investments to pay the claim. This amount is called The Reserve. The adjuster then moves money from The Reserve back into the investment pool as they learn more about the value of the claim or as the injured person lowers their settlement demand during negotiations. An excess verdict exceeds the amount of policy and The Reserve. This reflects poorly on the adjuster who misevaluated the case, and their lawyer who lost at trial. Ultimately, the insurance company loses money beyond their original budget for the claim, invites additional litigation of the excess verdict, and risks bad publicity.
The injured person benefits because the potential of a bad faith claim puts pressure on the insurance company to offer their maximum policy limits or risk the additional costs of an excess verdict.
- Driver A runs a red light and crashes into Driver B.
- Driver A has a GEICO insurance policy with $100,000 in liability coverage.
- Driver B has a back injury, goes to the hospital, gets physical therapy, receives pain management, misses six weeks of work, and has some residual back pain. His medical expenses and lost wages are $30,000.
We believe that Driver B’s case value exceeds the $100,000 policy limits and demand $100,000 to settle the case. GEICO is motivated to offer the policy limits because they do not want to incur a bad faith claim or exceed The Reserve.
The Bad Faith Letter
The bad faith letter is another tool in the arsenal to apply pressure on the insurance company and force a policy limits offer. Typically, we send a letter to the insurance company during the course of litigation that addresses a number of key issues. The letter emphasizes the strengths of our case including the defendant’s violation of community safety rules, the significant injuries caused by his or her violations, the medical expenses incurred, time lost from work, and the overall impact on the victim.
The letter clearly states that our client’s case value exceeds the insured’s policy limits. Therefore, failing to offer the policy limits and settle the case to protect their insured demonstrates bad faith. Ultimately, this letter will become evidence in the subsequent bad faith claim when evaluating the 6-factor test established by the Maryland Court of Appeals.
Oftentimes, there is an information gap between the insurance company and their insured. The insurance lawyer has told his carrier or his client that he is doing a great job and that everything is going well. The insured does not know that his personal assets and wages are at risk. Therefore, we state that our letter must be shared with the insured and enclose extra copies via certified mail.
Beyond the bad faith letter, there are other opportunities to communicate the risk of an excess verdict to the negligent driver. During depositions, we will mark the bad faith letter as an exhibit and ask the negligent driver to review the contents. At mediation, we may remind the defense attorney and his client what will happen after an excess verdict, which can include notices of wage garnishment to their employer or lien on their nice new home.
Bottom Line: Bad faith can be a weapon for the injured and allows us to obtain maximum policy limits results for our clients.
January 22nd, 2018|
What is Personal Injury Protection (PIP)?
Personal Injury Protection (PIP) is an optional coverage under a Maryland automobile insurance policy. PIP is a no-fault benefit guaranteeing some compensation to motor vehicle accident victims. Larimore v. American Ins. Co., 69 Md. App. 631 (1987). Benefits are payable without regard to the fault or non-fault of the individual in causing or contributing to the accident. Pennsylvania Nat’l Mut. Cas. Ins. Co. v. Gartelman, 288 Md. 151 (1980). The purpose of PIP is to provide to an insured and, under certain circumstances, to person injured while occupying the insured’s vehicle, “medical, hospital, and disability benefits.” Maryland Insurance Code Section 19-505(a). PIP coverage enables accident victims to avoid delays in receiving money for medical bills and lost wages after a crash instead of having to wait months or years for the resolution of the claim against the person or company responsible for the accident.
Many people are concerned that making a PIP claim will raise their insurance cost or will result in the insurance company dropping the policy holder. However, Maryland law protects against that. An insurer is not permitted to increase the cost of the insurance or impose a surcharge after a PIP claim is made and/or paid. §19–507(c)(1) and (2).
The First Requirement – A Motor Vehicle
In order to qualify for PIP benefits, there must be involvement of a motor vehicle. Section 19-501(b)(1) defines “Motor vehicle” as a vehicle, including a trailer, that is operated or designed for operation on a public road by any power other than animal or muscular power. However, an important distinction is made in that a “motor vehicle” does not include a bus (as defined in § 11-105 of the Transportation Article) or a taxicab (as defined in § 11-165 of the Transportation Article). Thus, passengers in buses or taxicabs cannot look to the owner of the bus or taxi company for PIP benefits. However, if the bus or taxi passenger is covered by their own PIP policy or that of another, they may look to that policy for PIP benefits.
What about Motorcycles? Motorcycles are included under the statute as a motor vehicle. Speakman v. State Farm Mut. Auto Ins. Co., 42 Md. App. 666 (1979). However, insurance companies in Maryland may choose to exclude PIP coverage to motorcycle owners. Additionally, insurance companies may exclude PIP benefits under an automobile policy to individuals using a motorcycle. DeJarnette v. Federal Kemper Ins. Co., 299 Md. 708 (1984).
Section 19-505(c)(2) permits an insurer to exclude lost wage benefits for motorcycles, mopeds and motor scooters.
The Second Requirement – A Motor Vehicle Accident
A “motor vehicle accident” is defined as an “occurrence involving a motor vehicle that results in damage to property or injury to a person.” Section 19-501(c)(1). However, if the crash is caused intentionally by the insured, benefits are not applicable.
Who is eligible for PIP?
In order to qualify for PIP, a named insured (the person or persons identified in the insurance contract declarations) must have purchased PIP coverage. Because PIP is an elective insurance option, the insured pays a higher insurance premium for PIP coverage. If you are eligible for PIP, the insurance company must provide benefits for the following individuals:
- The insured
- Family members of the insured who live with the insured
- Permissive users of the vehicle
- Guests and or passengers in the vehicle
What benefits are available?
The minimum medical and lost wage coverage is for a total of $2,500.00 in benefits. This means that an individual eligible for PIP benefits may receive up to a total of $2,500.00 for medical expenses incurred and wages lost. However, Maryland law allows for purchasing additional PIP coverage in the amounts of $5,000.00, $10,000.00 or $20,000.00. Although the additional limits are available at an increased cost, that cost provides excellent value in the event you are involved in a crash and file for PIP. The extra cost is not very much, so it’s a good idea to purchase PIP beyond the $2,500.00 minimum coverage.
Income means wages, salaries, tips, commissions, professional fees, and other earnings from work or employment. When claiming lost income, the insurance company will require reasonable medical proof of your injury and verification from your employer that you missed time from work. Therefore, its best to secure a disability slip from your treating doctor as well as documentation from your employer of the hours, days, weeks and/or months you missed and your rate of pay. Most PIP applications contain a lost wage form that must be completed by your employer, but even with that supporting documentation, it’s not unusual for an insurance company to contact your employer (someone in payroll) to confirm the lost income. The amount of proof required by the insurance company is frequently dependent upon whether you are an hourly employee, salaried employee or paid commissions and bonuses.
19-505(a)(3)(b)(1) defines income as:
- i. wages, salaries, tips, commissions, professional fees, and other earnings from work or employment;
- ii. earnings from a business or farm owned individually, jointly, or in partnership; and
- iii. to the extent earnings are paid or payable in property or services instead of in cash, the reasonable value of the property or services.
Lost income is paid at 85%, so if you miss two weeks of work totaling $1,000.00, the insurance company owes you $850.00.
The PIP insurance company need only pay reasonable and necessary medical expenses arising from a motor vehicle accident that are incurred within three (3) years after the accident. This includes hospital, medical, ambulance, dental, physical therapy, injections, funeral, nursing, surgical, chiropractic and other services. Hunt v. State Farm Mut. Auto. Ins. Co., 72 Md. App. 189 (1987).
An insurance company need only reimburse reasonable and necessary expenses incurred within three years after the motor vehicle accident. When the insurance company denies payment of medical expenses—regardless of the reason—the burden of proof is on the insured or plaintiff. Many insurance companies delay payment citing lack of medical records, lack of proper billing codes and other missing documentation. This has nothing to do with the injured person, but is a dispute between the medical provider and the PIP insurance company. Many insurance companies submit the bills to medical auditing services and then argue that the doctor’s charges are not reasonable and necessary and that the insurance company shouldn’t have to pay the bill in full.
Generally, to prove a medical bill is “reasonable” and that treatment is “necessary,” expert medical testimony is required. Metropolitan Auto Sales Corp. v. Koneski, 252 Md. 145 (1960). This presents a problem as frequently the cost for a doctor to testify in court as to reasonableness and necessity of care may exceed the cost of the disputed bill. However, if suit is needed, you will likely be able to file suit in small claims court where the technical rules of evidence are relaxed. Additionally, expert testimony is not necessary where the nexus between the accident and the insured’s injury is clearly apparent and the cause of the injury relates to matters of common experience. See Tully vs. Dasher, 250 Md. 424 (1968).
How do I apply for benefits?
The person injured as a result of a motor vehicle accident must notify the insurance company. Typically, this is done by telephone, and the insurance company then sends a PIP application. The PIP application consists of three forms:
- The PIP Application.
- Wage Loss Form to be completed by the employer.
- Medical Form to be completed by the treating doctor.
19–508(a)(2)(i) of the Maryland Insurance Code requires that you submit your PIP application to the insurance company within 12 months of the motor vehicle accident. The courts have interpreted this strictly. The application MUST be filed with the insurer no more than 12 months after the date of the motor vehicle accident. GEICO v. Harvey, 278 Md. 548 (1976). Maryland law requires the insurance company notify the insured of the last date that an application can be filed, but that doesn’t always happen. As a practical matter, there is no reason to delay filing the Maryland PIP Application Form, and the Wage Loss Form and Medical Form can be submitted separately when they have been completed.
Is it necessary to hire a lawyer to file a PIP application? Normally, no. A lawyer may not be needed if you are just making a PIP claim and are not pursuing legal action against the person causing the crash. However, if you are pursuing a claim against the responsible driver, it is to your benefit to seek legal advice for both the negligence claim and the PIP claim. As for the PIP claim, some law firms charge their clients an additional fee for filing and processing PIP claims. ChasenBoscolo does not. When choosing a law firm, be sure to ask about this additional fee.
How long does the insurance company have to pay?
By law, the insurance company has 30 days to pay “after the insurer receives satisfactory proof of claim.” §19–508(a)(1) Maryland Insurance Code. Unfortunately, what constitutes satisfactory proof of claim allows the insurance company to question medical bills, treatment records and time lost for work and otherwise results in frequent delays in the processing of PIP claims. The penalty for failure to pay on time is only 1.5% interest per month.
As a practical matter, when submitting the Wage Form, it is often beneficial to include your pay stubs from before the motor vehicle accident reflecting your weekly income and your pay stubs from after the accident showing lack of income. You should also advise the person in your employer’s payroll department who completes the form on your behalf that he/she will likely receive a call from the PIP insurer to verify the lost wages.
Exclusions From PIP Coverage
The mere fact that you were injured during a motor vehicle collision does not mean automatic entitlement to PIP coverage. §19-505(c)(1) permits insurance companies to exclude certain individuals from PIP coverage:
- i. an individual, otherwise insured under the policy, who:
- intentionally causes the motor vehicle accident resulting in the injury for which benefits are claimed;
- is a nonresident of the State and is injured as a pedestrian in a motor vehicle accident that occurs outside of the State;
[So a Virginian resident who is walking in the District of Columbia and is hit by a Maryland driver is NOT entitled to use the Maryland driver’s PIP insurance.]
- is injured in a motor vehicle accident while operating or voluntarily riding in a motor vehicle that the individual knows is stolen; or
- is injured in a motor vehicle accident while committing a felony or while violating § 21–904 of the Transportation Article; or
- ii. the named insured or a family member of the named insured who resides in the named insured’s household for an injury that occurs while the named insured or family member is occupying an uninsured motor vehicle owned by:
- the named insured
- an immediate family member of the named insured who resides in the named insured’s household.
In the case of motorcycles, mopeds, or motor scooters, an insurer may:
- i. exclude the economic loss benefits described in this section; or
- ii. offer the economic loss benefits with deductibles, options, or specific exclusions.
PIP coverage is optional in Maryland and therefore, not everyone with Maryland automobile insurance elects to purchase PIP. Most of the time, the decision not to purchase PIP is based upon money. You do save yourself a little money from your premium by waiving the PIP coverage; however, in the event of a collision, it will have been a penny-wise, pound foolish decision. ChasenBoscolo recommends purchasing PIP coverage.
In the event you do waive PIP, it must be a on a form approved by the Maryland Insurance Commissioner’s office, and it must be an affirmative waiver. That means that you must actually sign a document stating that you waive coverage. §19–506. If coverage is not specifically waived, the insurer shall provide coverage. Clay v. GEICO, 356 Md. 257 (1999).
If the policy holder waives PIP coverage, he/she cannot collect PIP from any other insurer. Maryland Auto. Ins. Fund v. Perry, 356 Md. 668 (1999). That means if you waive PIP on your own policy (and are not first named insured under another policy) and you are the passenger in your best friend’s car when it’s involved in a collision, you are not permitted to use your best friend’s PIP coverage. Additionally, the PIP waiver is binding on all listed drivers and family of the insured 16 years of age and older residing in the policy holder’s household.
Stacking of Benefits
The primary PIP policy is the insurance coverage on the vehicle in which a person is injured as a driver or passenger or as a pedestrian. Consider these examples for further explanation:
- John has a $5,000.00 PIP policy with his insurance company. However, John owns 2 other cars—also insured by the same insurance company—with $5,000.00 PIP policies. John is involved in a bad crash and sustains $15,000.00 worth of medical bills and lost wages. Can John stack his 3 PIP policies for a total of $15,000.00 worth of benefits? Under Maryland law, no. John is not able to stack (or add) the policies in that circumstance.
- John is a passenger in his girlfriend’s car. His girlfriend has $2,500.00 in PIP coverage. A bad crash results in $15,000.00 in medical bills and lost wages for John. In this instance, John first uses his girlfriend’s PIP policy and exhausts the $2,500 with her insurance company. John can then look to his own insurance company for an additional $2,500.00 in PIP payments, bringing the total for PIP to $5,000.00.
- John is a passenger in his girlfriend’s car. This time, she has $10,000.00 in PIP coverage. Even though John only has a $5,000.00 PIP policy for his own car, he is able to use the $10,000.00 limits of his girlfriend’s policy. John cannot stack his policy with hers for a total of $15,000.00 in PIP benefits.
- John’s girlfriend is driving her own car, but she failed to timely pay her insurance premium. As a result, her insurance policy lapsed. Therefore, her vehicle was uninsured. John was a passenger in the vehicle and still had $5,000.00 PIP coverage on his personal car. His girlfriend crashed the car and John sustained $15,000.00 in medical bills. Although her vehicle doesn’t have insurance, John is able to use his PIP policy for $5,000.00 worth of benefits.
- John has the insurance coverage noted above ($5,000.00 PIP). This time he is married. However, his wife is an excluded driver because she has been convicted of multiple DUIs. Excluded means that John’s motor vehicle insurance policy specifically excludes his wife from operating his cars. Nonetheless, John’s wife needs to run an errand and is involved in a crash while driving to the store. Under Maryland law, she is not entitled to PIP, as she is an excluded driver of John’s car. However, if she was a passenger in John’s car when it crashed, she would be entitled to PIP benefits.
- John has the insurance coverage noted above. John is walking across a street in Maryland when a passing car strikes him. Which PIP applies? The PIP coverage on the car that struck John is primary and if it only had $2,500.00 in coverage, John could look to his own personal PIP policy for up to $5,000.00 in benefits.
- John has the insurance coverage noted above. John is a passenger in a taxi. The taxi crashes. Under Maryland law, the taxicab is not required to have PIP insurance and therefore, John will use his personal PIP policy.
- John has the insurance coverage noted above. John is the passenger in an Uber or Lyft vehicle. The vehicle crashes. John will use the PIP policy of the Uber or Lyft vehicle since Maryland law treats Uber and Lyft vehicles much differently than taxis. Thus, John would use the first $2,500.00 from the Uber or Lyft vehicle and then look to his own personal policy for additional benefits.
Health Insurance and Workers’ Compensation Benefits and PIP
If a driver or passenger is working at the time of the injury, he may be entitled to PIP and workers’ compensation benefits. However, it is very important to coordinate the timing of filing for both benefits. Since Maryland law permits the PIP insurer to reduce benefits payable to the extent workers’ compensation benefits are actually received, if someone injured in a car crash files for workers’ compensation benefits and those benefits are paid in excess of the PIP coverage, that person would not then be able to seek PIP benefits. As noted where an injured worker receives workers’ compensation benefits in excess of the PIP coverage, he/she is entitled to nothing from the PIP carrier. §19-513(e) and Smelser v. Criterion Ins. Co., 293 Md. 384 (1982).
As a practical matter, the opposite is not true. The PIP carrier is generally not entitled to a credit or to be reimbursed by the workers’ compensation insurance company as long as the PIP is exhausted first. An exception to this rule is if the employer is self-insured. When someone is working and is entitled to file both a workers’ compensation claim and a PIP claim, it’s beneficial to file and exhaust the PIP claim first and timely file the worker’s compensation claim thereafter.
Since PIP pays lost income at 85% whereas workers’ compensation only pays at 66%, there is an advantage to filing and exhausting PIP first. Additionally, when you are out of work and receiving medical care after a motor vehicle collision, you and your doctor will want to be paid. Many medical providers will have you sign forms allowing your doctor to submit forms directly to the PIP carrier. In such circumstances, it’s not unusual for the doctor to be paid and or to exhaust the PIP coverage leaving you no money for your lost income. Therefore, it is critically important to be aware of the timing of your PIP claim and presentation of the supporting documentation to ensure you are timely paid your lost income.
If you have health insurance and available PIP coverage, you will likely make use of both coverages after a collision. Once again, you should use your PIP first for lost income and then your medical bills if not exhausted. Health insurance companies do not get a credit for PIP benefits paid to you or to your medical providers. Some medical providers prefer to be paid by PIP insurance rather than health insurance since PIP frequently pays a higher percentage of the bill.
If you have any questions about PIP or MedPay benefits in your car crash claim, please feel free to give us a call. You may call us toll-free at (800) 322-3380.