All About PIP Insurance

Recovering from life-threatening injuries after a bad car wreck is difficult enough without worrying whether your personal injury protection (PIP) coverage is going to cover the medical bills. Though this no-fault benefit covers treatment right after an accident, it is quite limited.

At The Law Office of Christopher Jackson, we can work to help ensure you receive your PIP coverage as well as pursue other avenues for compensation that can assist with high medical expenses. Let us handle the paperwork, so you can focus on what is most important: your recovery.

What Is PIP?

In automobile collision cases, Kentucky is a no-fault insurance state requiring every automobile insurer to provide minimum no-fault insurance benefits of $10,000 per person to cover medical expenses and/or wage loss. These benefits are also known as basic reparations benefits (BRBs) or personal injury protection (PIP) benefits. Most lawyers who regularly handle these cases call it PIP.

Statute Of Limitations For Automobile Collisions Occurring In Kentucky

The statute of limitations in Kentucky for an automobile collision is two years from the date of the accident. KRS 304.39-230(6). However, if PIP benefits are paid, then the statute of limitations is extended to two years after each PIP insurance payment. KRS 304.39-230(6). So, each time your PIP insurance carrier makes a payment, the two-year "clock" starts over for purposes of the statute of limitations.

There are a few caveats. First, the "clock" starts to run upon issuance of the PIP insurance payment, not the date your medical provider cashes the check. Wilder v. Noonchester, 113 S.W.3d 189 (Ky. App. 2003). Second, payments made under your medical payments coverage (example, Kentucky Farm Bureau typically includes Med-Pay on their policies and issues payment from that coverage after PIP is exhausted) are not the equivalent of a PIP insurance payment and does not extend the statute of limitations. Lawson v. Hilton Sanitation, Inc., 34 S.W.3d 52 (Ky. 2000). Lastly, PIP insurance payments and the MVRA do not extend the basic two-year statute of limitations for property damage claims. American Premier Ins. Co. v. McBride, 159 S.W.3d 342 (Ky. App. 2004).

Statute Of Limitations For Commencing An Action For (Or Collecting) PIP Insurance Benefits

KRS 304.39-230(1) provides that an action for PIP insurance benefits must be commenced no later than two years after you suffer the loss (i.e., incur medical bills and lost wages) and either knows/should have known that the loss was caused by the accident, or not later than four years after the accident, whichever is earlier. Meaning, the statute of limitations for purposes of collecting PIP insurance runs from the date of the medical treatment, not the car wreck. So, if you waited more than two years after the accident, a claim for PIP insurance benefits can be presented for the first time up to four years after the accident. However, you may only collect bills incurred within two years of your first claim; in other words, there is a two-year "look-back" period. Therefore, medical bills incurred more than two years before the suit for PIP insurance benefits cannot be collected. The Kentucky Court of Appeals addressed this issue in State Auto v. Lane, 697 S.W.2d 167, 169 (Ky. App. 1985), stating "recovery may be had (PIP insurance benefits) for prior losses only if they accrued within two years before suit is filed."

KRS 304.39-230(1) also states that an action for additional PIP insurance benefits must be commenced not later than two years after the last PIP payment. Such an action for further benefits is timely commenced when a request has been made within two years of the last PIP payment, even though the requested payment was not made until after the two-year window. Moore v. Gross, 2006-CA-2039 (unpublished opinion).

This begs the question as to whether you can revive an action against a tortfeasor if suit was not filed within two years of the accident and no PIP benefits were ever paid, but a PIP claim is opened and benefits are paid within four years of the accident pursuant to KRS 304.39-230(1).

Which Automobile Carrier Pays PIP?

Client is a passenger: If you are a passenger in a car, then the owner's insurance has to pay your PIP benefits. KRS 304.39-050(1). If the owner does not have PIP, then any other PIP insurance policy under which you are an insured applies. KRS 304.39-050(2). So, if the owner doesn't have insurance and you have your own policy, then your insurance policy will provide the PIP benefits. If you do not have insurance, then you file a claim through the Kentucky Assigned Claims Plan. KRS 304.39-160.

Client is pedestrian: If you are a pedestrian, then the insurance company for the car that struck you owes the PIP insurance benefits. KRS 304.39-050(1). Same as above, if the striking car doesn't have insurance, then your insurance policy will provide the PIP benefits.

What Happens To The PIP Lien If The Tortfeasor's Liability Limits Are Exhausted?

In cases where you collect the entire liability limits from the tortfeasor's automobile carrier, the PIP lien is automatically extinguished. The MVRA gives priority of recovery to the injured person over the PIP insurance carrier. KRS 304.39-070(4) read together with KRS 304.39-140(3). See also State Auto Mut. Ins. Co. v. Empire Fire & Marine Ins. Co., 808 S.W.2d 805 (Ky. 1991).

Out-Of-State Clients Injured In Kentucky

If you live in another state, but were injured in Kentucky, then you are entitled to collect PIP insurance benefits. KRS 304.39-030(1).

As recently as 2007, the Kentucky Court of Appeals succinctly stated the general rule that "out-of-state insurance companies [that do not do business in Kentucky] are not required to comply with Kentucky no-fault requirements for their insureds who are not Kentucky residents but who are involved in motor vehicle accidents in Kentucky." Stephenson v. State Farm, 217 S.E. 3d 878 (Ky. App. 2007) citing State Farm Mut. Auto Ins. Co. v. Tennessee Farmers Mut. Ins. Co., 785 S.W.2d 520 (Ky. App. 1990). The court went on to explain that only out-of-state insurance companies that are registered to do business in Kentucky are required to pay PIP insurance benefits to insureds residing out of the state who are involved in an automobile accident in Kentucky. Stephenson at 880.

If your out-of-state automobile carrier does not do business in Kentucky, then your client must collect PIP insurance benefits through the Kentucky Assigned Claims Plan. KRS 304.39-160. The required forms can be found on the Kentucky Department of Insurance website located at http://doi.ppr.ky.gov/kentucky/docs.asp?Divid=13

Directing PIP Payments

You can direct the PIP insurance carrier on how to use your PIP insurance benefits, such as reserving them for lost wages or designating which medical providers to pay first. However, this must be done in writing. KRS 304.39-241. In more serious cases, you should direct PIP insurance to pay wages and medical bills. Use your health insurance to process all medical bills, and use PIP insurance for copays, deductibles and noncovered items. Later, we can negotiate a reduction on the subrogation health insurance lien. Another option is to send the PIP carrier $10,000 worth of unpaid medical bills and direct the PIP insurance carrier to send you the entire PIP insurance benefits made payable to you and your client. Then, you can deposit the $10,000 in PIP insurance benefits in our escrow account, which you can hold to cover the above items and use to negotiate any health insurance subrogation claim.

Injured Party Does Not Control PIP's Subrogation Claim

You do not have control over PIP's subrogation claim and, therefore, cannot extinguish this claim by signing a release. Likewise, the signing of a release does not affect your right to collect future PIP insurance benefits (assuming PIP insurance benefits remain). See Ohio Casualty v. Ruschell, 834 S.W.2d 166 (Ky. 1992) and Holzhauser v. West American, 772 S.W.2d 650 (Ky. App. 1989).

Motorcycles And PIP

PIP insurance is available for motorcycles, but it is an optional coverage that must be separately purchased. Your automobile PIP insurance will not cover injuries on a motorcycle. KRS 304.39-040(4). This provision applies to both operators and passengers of motorcycles.

Injured Plaintiff Is Uninsured

If you were uninsured at the time of injury, then you cannot recover PIP insurance benefits, nor can you bring a direct tort claim for damages that fit within the definition of "basic reparations benefits." KRS 304.39.310(2) & Bartlett v. Prime Ins. Syndicate, 156 S.W.3d 299 (Ky. App. 2004).

PIP Insurance & Work Loss Benefits For Plaintiffs Unemployed On Date Of The Accident

If you are unemployed at the time of an automobile accident, but are offered a job after that accident that you cannot fulfill (or accept) because of a physician's advice, then you can collect work loss benefits under PIP. Foster v. Kentucky Farm Bureau Mut. Ins. Co., 189 S.W.3d 553 (Ky. 2006)

Contact Us For Highly-Skilled Representation

Call us at 859-261-1111 or toll-free at 888-811-3247, or inquire by email to speak with an attorney about your accident. Learn how PIP insurance works, and receive the legal guidance you need.