Understanding Auto Insurance
If you are involved in an automobile accident you and your loved ones will often require immediate medical treatment. Who pays for this treatment and when do they pay? Your insurance policies for Maryland and the District of Columbia may include terminology such as PIP (Personal Injury Protection), medical payment and no fault insurance. Let me explain each of those coverages
Personal Injury Protection (PIP) Is a first party, limited, no fault coverage offered under all Maryland and District of Columbia automobile insurance policies. These coverages are not mandatory and are only provided upon request and for additional premiums. They cover medical expenses and lost wages.
Medical Payment Is a limited form of no fault insurance offered under your automobile insurance policy which provides coverage for medical expenses only. Medical payment covers only medical payments and does not provide any payment if you lose time from work.
PIP and medical payment coverages are to insure that a person injured in an automobile accident, regardless of fault, is provided immediate medical treatment and immediate lost wages. Maryland PIP coverage provides the minimal amount of $2,500 to cover reasonable and necessary medical expenses and for lost wages. This coverage is not determined by fault in the accident and is provided to the driver and passengers of the vehicle which they were occupying at the time of the accident. The emergency hospital facility and/or the treating doctor will ask for your PIP provider to ensure they will be paid before providing treatment at their facility. When this occurs the hospital or treating doctor will directly bill the insurance carrier and receive payment under the PIP portions of your policy. You should always be aware of the limits of your PIP coverage so that you may reserve sufficient PIP funds to cover lost wages in the event that your injuries keep you out of work. In the State of Maryland, PIP coverage can extend up to $10,000 and this may be divided between PIP coverage and medical payments.
The most significant feature of the PIP and medical payment provisions are that these payments are benefits derived from your contract with your automobile insurance company and need not be reimbursed should you collect monies in a civil lawsuit against the driver who caused your accident. Unlike coverage under your health insurance plan, PIP benefits are not required to be reimbursed to your insurance company if you prevail in a liability action against the adverse driver who caused your injuries.
Comment of Counsel Even if you have medical insurance which you believe will pay for your hospitalization and treatment following an automobile accident, if your medical insurance does pay for your treatment resulting from an automobile accident they are entitled to reimbursement of any payments they made in the event you bring action against the adverse driver and successfully obtain a monetary award.