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PIP Insurance | Article | McKay Law

Personal Injury Protection (PIP)

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What is “PIP”?

Personal injury protection (PIP) is a type of mandatory insurance coverage that many Texans waive without fully understanding it. This type of insurance gives policyholders the option to file a claim with their own insurance company after an accident. Personal injury protection applies to all passengers in a vehicle, regardless of who is at fault for the crash.

Texas law requires Personal Injury Protection be offered to a consumer who purchases liability insurance. There is no requirement that the consumer actually purchase the PIP coverage. But there is a requirement that PIP be “offered”. In order to prove that Texas Personal Injury Protection (PIP) was actually offered, and then the consumer rejected the coverage, there must be a “signed written rejection” on file with the insurance company. If there is no signed written rejection of the PIP coverage, then there is coverage . . . whether paid for or not!

The minimum Texas Personal Injury Protection (PIP) limits is $2500.00 and the maximum coverage depends on your insurance company but can be thousands of dollars.  In other words, insurance companies are required under Texas law to automatically provide $2,500 PIP coverage, but you can pay to have more PIP coverage.

When the policy is renewed the next year, a new rejection is not required. Once rejected, the policy holder continues to not have PIP coverage from renewal to renewal, until they contact the insurance company and ask for coverage.

Why Pay for “PIP”?

I tell my clients and loved ones to AWLAYS INCLUDE PIP Coverage when buying insurance plans! The reasons for PIP coverage include but are not limited to the following:

1. PIP PAYS NO MATTER WHO’S FAULT

PIP does not care that the accident was your fault. 

It will pay for your injuries related to the accident even if YOU caused the accident!

PIP is a comprehensive automotive insurance provision designed to cover expenses incurred during and after a car accident regardless of the party at fault.

It does NOT matter if the accident you were involved in was your fault or the fault of an another driver.  PIP coverage Pays you and any passengers in your car to cover certain expenses no matter what!

Example:

You are a driver and have $5,000 of PIP insurance coverage.  One afternoon you are driving your car with three of your friends on the way to the law offices of McKay Law.  While driving, you had a sneeze attack causing you to rear-end another vehicle causing you and three passengers in your vehicle to go the Emergency Room.  Everyone in your vehicle required medical attention from an Emergency Room Physician. 

After your visit to the Emergency Room, the bill for your one visit is $6,000.  The bill for each passenger in the car is also more than $5,000.  Because you have PIP coverage, all of you are entitled to receive a check from the insurance company for the amount of coverage you have.  So in this case, each person should receive a $5,000 check for compensate them for the injuries causes by the accident.  

If a passenger only had $1000 worth of medical bills that are presented to the insurance company, the PIP coverage will pay that individual $1,000 even though there is $5,000 coverage.   

NOTE:  when requesting for your PIP payment from a PIP adjuster, request that the check be written and paid directly to you and/or to your lawyer.  Do NOT  consent for your PIP adjuster to send the payment to vendor or provider.  You are entitled to the money as the insured and you have the right to pay and even negotiate the amount of payment the vendor, treating provider and/ or facility receives.

Personal injury protection (PIP): Pays medical bills plus lost wages and other costs for you and your passengers. PIP can even cover “replacement services” for household contributions (for example, hiring someone to clean the house because you’re no longer able).

Some costs covered by personal injury protection include the following:

  • Medical bills associated with injuries caused by an accident
  • Transportation by ambulance
  • Physical therapy and other rehabilitation
  • Funeral costs
  • Lost wages from injury
  • The cost of hiring at-home care

2. PIP PAYS PROMPTLY

YOU DON’T HAVE TO WAIT UNTIL YOUR CASE SETTLES TO GET PAID

Importantly, personal injury protection (PIP) provides relief for families who are in financial need but cannot wait for the outcome of litigation or a third-party claim.  Since PIP claims are unaffected by fault, policyholders can reasonably expect a prompt payout shortly after a car accident.

While payments resulting from litigation may be delayed by months or years, PIP coverage typically pays out quickly.  As explained above, there is also typically no need to determine fault before using your PIP coverage.

A personal injury protection policy can provide someone financial relief while the opposite party’s insurer investigates a claim.

Example:

You were hit by an 18—wheeler truck!  You are alive – thank GOD! But you are badly injured and the driver of the claims it was your fault!  You suspect the 18-wheeler driver was impaired because he was slurring after the accident and you want him punished for endangering you and others on the road.  Your car is TOTALED.  You were taken by ambulance to the Emergency Room.  Thankfully you called the law office of McKay Law to help you!  You are so hurt that you will not be able to work, you have no car, and you want to McKay Law to go after the 18-wheeler driver and his company.  McKay Law advises you that they will get you EVERY dollar you deserve!  McKay Law also advises you that we have to prove up your case for them to pay the policy limit and it will take some time.  But you need money NOW!  Thankfully, you have PIP Coverage in the amount of $15,000!  As soon as McKay Law presents your bills and costs to your PIP adjuster, you will receive your check.  You don’t have to wait until the end of the case! 

Never Worry: McKay Law will always make sure you are taken care of during the pendency of your case!

3. PIP COVERAGE IS WORTH THE COST

The cost of PIP insurance typically increases a modest amount if you purchase a higher level of coverage than the $2,500 minimum available.  As you see from the sample quotes below, a driver with the state’s minimum liability insurance requirements could pay less than $39 per month to add $10,000 in PIP coverage.

Example:

 NO PIP COVERAGE$2,500 PIP$5,000 PIP$10,000 PIP
COST OF PIP$0$20.48$28.05$38.91
TOTAL MONTHLY PREMIUM$101.24$121.72$129.29$140.15

Unlike true no-fault states, if you reject PIP coverage in Texas, it won’t impact your liability insurance premiums. This is because Texas doesn’t have a tort threshold that would restrict your ability to bring a lawsuit against another party in an accident. Tort thresholds are often part of the law in no-fault states that require PIP insurance, as they limit lawsuits to only those accidents in which injuries are relatively significant.

4. NO SUBROGATION FOR PIP PAY

PIP coverage is not subject to subrogation in Texas. This is an important point because subrogation is the process insurance companies use to pursue reimbursement. People with PIP coverage on their policies will not be required to return PIP payments paid out after an accident.

Example:

If you settled with an at-fault driver’s insurance company for $10,000, but you hired McKay Law and with their help you already received $5,000 in PIP coverage, you would not have to return the $5,000 after settling because PIP is not subject to subrogation (meaning you keep $15,000 total instead of only the $5,000)! It helps to think of ‘subrogation’ as a fancy word for reimbursement.

Required Auto Insurance Coverage in Texas

Every auto owner in Texas must carry basic liability insurance to pay for damages they cause. Known as 30/60/25 coverage, this type of minimum plan pays the following benefits after a traffic crash.

  • Basic liability insurance covers:
    • $30,000 for injuries per person, up to $60,000 per crash
    • $25,000 for property damage

These amounts may sound like a lot of coverage, but they probably won’t be enough to pay for all the damages in a multi-vehicle crash or a wreck that causes severe injuries. So, if the at-fault driver carries minimum coverage and causes a serious collision, there’s a good chance you’ll be stuck with a lot of leftover medical bills and other damages that aren’t covered.

Besides the basic liability coverage requirement, if a driver still owes money on their vehicle, their insurance carrier will require the following additional coverages:

  • Collision coverage to fix or replace the vehicle
  • Comprehensive coverage in case the vehicle is stolen or damaged by something other than a collision (such as a flood or fire)

Others Forms of OPTIONAL INSURANCE COVERAGE in Texas Include:

  • Uninsured/underinsured motorist (UM/UIM): Pays your medical and repair costs if the at-fault driver has no coverage or not enough coverage, or if you’re the victim of a hit-and-run crash. This is optional coverage, but you must opt out in writing if you don’t want it, similar to PIP.
  • Towing and labor: Pays towing costs for undriveable cars and labor for changing flat tires or jumping dead batteries.
  • Rental reimbursement: Pays car rental costs if your vehicle is being repaired post-crash or was stolen. Some policies may cover taxi costs and charges for ridesharing services.
  • Personal injury protection (PIP): Pays medical bills plus lost wages and other costs for you and your passengers. PIP can even cover “replacement services” for household contributions (for example, hiring someone to clean the house because you’re no longer able). This is optional coverage, but you must opt out in writing if you don’t want it.
  • Medical payments (Med Pay): Pays medical bills for you and your passengers. Similar to PIP but doesn’t pay for lost wages. PIP coverage is usually a better option.  (See Below PIP vs. MEDPAY)

MedPay vs Personal Injury Protection

Insurance companies in Texas aren’t required to offer medical payments coverage, also called MedPay, as they are with PIP insurance. If your insurer does offer both alternatives, you’ll only be able to choose one, as Texas law prohibits them from both being included on an auto insurance policy.

MedPay is similar to PIP insurance in that it covers medical expenses, hospital bills and similar costs related to injuries from car accidents. And MedPay will cover expenses no matter what party was at-fault, also similar to PIP coverage.

  1. PIP insurance also covers lost wages and reimbursement for certain services that MedPay does not cover.
    So, for example, if you cannot work as result of your injuries from a car wrekc,  PIP would reimburse you for lost wages, while MedPay would not.
  2. MedPay will be less expensive, for similar levels of coverage, as it’s essentially one component of PIP insurance.
  3. MedPay in Texas is subject to subrogation, while PIP coverage is not.

Example:

Instead of PIP, you had $2,500 of MedPay coverage, which was used to pay for hospital bills after an accident.  You hired McKay Law and received a $10,000 settlement from the insurer of the other party involved in the accident.  Because MedPay paid you $2,500 for injuries you related to this accidenct, you would have to reimburse your own insurer for the $2,500 of MedPay used. However, if you had $2,500 of PIP coverage instead of MedPay coveryage, you would be able to keep the entire sum.

If you are injured, it is important to receive medical care soon after an accident. If you are are looking for quality care for an automotive injury while your personal injury case is pending, please contact our office at (903) 999-2653 to schedule your appointment with McKay Law to ensure you get the money you deserve while we evaluate your lawsuit. 

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Lindsey McKay | Personal Injury Lawyer | Personal Injury Attorney | McKay Law | Legally Bold
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