Personal injury protection (PIP) claims in Delaware are probably the most complex types of insurance claims and can result in lawsuits against car insurance companies. This is especially true in serious injury auto accident cases such as intersection accidents, pedestrian accidents, etc.
Below is a discussion of PIP coverage and the importance of reserving PIP for lost wages.
The Basics of PIP Coverage in Delaware
Residents of Delaware who are insured under auto insurance policies issued in this state are entitled to make claims for PIP benefits after car accidents. PIP claims may be made for medical benefits, lost wages due to disability, household help, etc. In cases of death, claims may be made for funeral costs.
Individuals may be covered under their own insurance policies, i.e. policies they purchased themselves. Alternatively, they may be covered under another person’s policy, such as a spouse or parent. Therefore, in most cases, a child who is injured in a car accident can make a claim for PIP benefits under a parent’s auto insurance policy.
PIP is Separate from Property Damage Coverage
PIP is entirely separate from property damage claims. Under Delaware law, residents who purchase car insurance in this state are required to carry at least $10,000 of property damage coverage. This coverage kicks in when you are responsible for causing an accident. Therefore, if you caused an accident that resulted in property damage to another person’s property, your auto insurance policy kicks in and provides coverage up to the amount purchased. On the other hand, if you were in a car accident caused by someone else, the damage to your car is paid for by the at-fault driver’s auto insurance company up to the amount of the limits of their property damage coverage.
Reserving PIP for Wage Loss Claims
One of the issues that often arises in serious injury auto accident cases in Delaware is reservation of PIP for lost wages. The minimum amount of PIP benefits required under Delaware auto insurance law is $15,000 per person, $30,000 per accident. While some people choose higher limits, many Delaware residents choose the minimum limits. This means that there is often not enough PIP benefits coverage available to pay for lost wages. This is because most of the PIP benefits are used to pay extensive medical bills.
In serious injury car accident cases, it is crucial to notify the PIP adjuster (insurance company representative) that you are requesting PIP coverage to be reserved for lost wages. Otherwise, the insurance company will simply pay medical bills in the order received. In major injury cases, emergency room bills alone can nearly exhaust a minimum limit ($15,000) PIP policy. Once notified of the request to reserve PIP for lost wages, most insurance companies will deny medical bills and hold PIP until you make a claim for lost wages.
This is important because many people have other avenues to pay for medical bills (i.e., private health insurance), but not many avenues to obtain lost wages. For example, a Delaware resident seriously injured in an auto accident in Wilmington suffers injuries which prevent him from returning to work for several months. His lawyer reserves PIP for lost wages at the outset. Therefore, the medical bills get submitted to the private health insurance carrier, and he receives PIP benefits for his lost wages. This is the most ideal scenario to offset the immediate financial losses caused by the car accident. Later, in a subsequent car accident lawsuit against the at-fault driver, the injured plaintiff can make a claim for medical bills that were paid by the health insurance company as well as any lost wages not paid by PIP. This is in addition to a claim for pain and suffering.
Earlier this year in April, Senate Bill #195, sponsored by Senator McDowell (D-Wilmington) was introduced in the Delaware legislative session. SB 195 sought to change PIP law. Under the proposed amendment, injured individuals (or their attorneys) could direct auto insurance companies to allocate or reserve benefits for lost wages and could also direct auto insurance companies on how to pay PIP benefits and to whom. However, the insurance lobby fought the bill which was then tabled in committee.
For more information, visit the Delaware car accident law library, brought to you by our Wilmington car accident lawyers. Please call the office for a free consultation. (302) 658-1717
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