Understanding Automobile InsuranceJuly 20, 2017
Understanding Automobile Insurance
by Terry Gross
1. What is full coverage?
There really is no such thing. It’s pretty much like “beauty is in the eye of the beholder.” The coverage should mirror your economic wherewithal. In other words, I would expect an older lawyer with a greater income to have much more insurance coverage than a young lawyer just starting out. Car insurance not only protects you from liability if you cause an accident, but more importantly in Florida, you should always have uninsured motorist coverage equal to your bodily injury since so many drivers out there only have a $10,000 limit. If you have multiple vehicles, you should always have stacking coverage. Even if you have health insurance, you should always purchase at least $10,000, if not $20,000 of med pay to compliment and supplement your PIP coverage.
2. Why do we have no fault as opposed to just pursuing the at fault party for medical bills at the outset in a car wreck?
Unfortunately, it takes most competent personal injury lawyers one to three years to resolve a bodily injury claim. Many people cannot wait that long to have their bills paid, since they may not have health insurance or have large deductibles, which is very common in this day and age. Also, there is a disability component under PIP or no fault in that they must pay 60% of your gross loss wages within two weeks of presentment. Even is you have disability through work, most disability policies have a 180 day deductible, which means you would receive no compensation unless you are out of work for over six months. If one is injured and out for only two to three weeks, there would be no compensation without no fault. It is a really good system, although the legislature is meeting right now to do away with no fault and maybe increase bodily injury to $25,000.
3. Why would you encourage someone to have medical coverage as opposed to using health insurance, if injured in a car accident?
First of all, many policies today have large deductibles. Second, most health insurance carriers utilize a gate keeper or a primary care doctor for referrals. Under your med pay, you can pretty much see anyone you wish. Many people use chiropractors initially for neck and back injuries. Many health insurance policies do not cover chiropractic or have only very limited amount of visits authorized per year. While health insurance and med pay can both subrogate, or seek reimbursement at the end of a case, it is much easier to deal with a med pay carrier on subrogation issues than some forms of health insurance such as Medicare. Furthermore, if you look at your insurance premium, Med pay is extremely cheap and would make sure that if you had a severe accident with a lot of initial medical bills at the ER, that the vast majority of them would be taken care of in a timely fashion and thereby protect your credit. Finally, if you missed work, but had a lot of med pay from a car accident, you could designate the no fault carriers to reserve your PIP for lost wages and pay your medical bills through med pay, which is a tremendous advantage.
4. What is the most frustrating aspect of being a personal injury lawyer?
Quite frankly, it is the lack of insurance coverage. All too often we encounter people that have been injured seriously due to the negligence of another, yet the defendant had little or no coverage and our client either rejected uninsured motorist coverage or only had very little. We still take these cases, but they are very timely in that even if the defendant and UM carrier tender early, we spend up to a year or more negotiating liens with medical facilities or health insurers that have a right to subrogate.icies today have large deductibles. Second, most health insurance carriers utilize a gate keeper or a primary care doctor for referrals. Under your med pay, you can pretty much see anyone you wish. Many people use chiropractors initially for neck and back injuries. Many health insurance policies do not cover chiropractic or have only very limited amount of visits authorized per year. While health insurance and med pay can both subrogate, or seek reimbursement at the end of a case, it is much easier to deal with a med pay carrier on subrogation issues than some forms of health insurance such as Medicare. Furthermore, if you look at your insurance premium, Med pay is extremely cheap and would make sure that if you had a severe accident with a lot of initial medical bills at the ER, that the vast majority of them would be taken care of in a timely fashion and thereby protect your credit. Finally, if you missed work, but had a lot of med pay from a car accident, you could designate the no fault carriers to reserve your PIP for lost wages and pay your medical bills through med pay, which is a tremendous advantage.
5. What are some of the recent changes that occurred when they had the major overhaul of PIP in 2013?
There were many. First, if a person does not treat within fourteen (14) days of an accident, they have lost their no fault benefits altogether. Second, if they do treat within fourteen days, a medical doctor, dentist or physician’s assistant would have to opine that the injured party had an “emergency medical condition” before the PIP carrier would have to extend benefits from $2,500 up to the policy limits of $10,000. A chiropractor is not authorized to give an EMC certification. Furthermore, the legislature deemed that no fault carriers would no longer be responsible for massage therapy or acupuncture in relation to treatment for injuries in a car accident. It is my belief that this last provision will ultimately lead to the statute being declare unconstitutional by out appellate courts, since I doubt that there could be any scientific showing for the justification of singling out these two professions.
6. What is the most difficult aspect of your practice?
Since 1996, when the Florida Supreme Court issued MATTHEWS V. BLUE SHIELD, lawyers are required to set aside funds for any subrogation interest of any potential health insurer. This has created a significant amount of additional work requiring many personal injury law firms, like ourselves, to hire additional paralegals who deal strictly with medical bills and subrogation rights. Every entity that pays has a different subrogation formula. Specifically, Medicare’s subrogation system is totally different from TriCare, which is different from VA and private insurance. Sometimes there can be hidden medical insurance payments, especially if a claimant is using a pharmacy for prescription medications that may be unknown to the claimant’s law firm. Nonetheless, this could create a hidden Medicaid or Medicare subrogation right that would have to be honored at some point, even if the client has already received their proceeds. If so, this would come out of the lawyer’s pocket. Many times the lawyer may settle the case and yet a year later the file is essentially still open dealing with subrogation issues. A problem that arises every now and then is when a federal entity such as Medicare chooses to bundle coverage where an elderly person who may have been treating for many different reasons also gets treatment for accident related symptoms and yet Medicare seeks reimbursement for all the treatment received. Dealing with Medicare is no easy task.
7. What can be done if the no fault carrier refuses to make payment on accident related bills?
Since the 2008 amendment of the no fault statute, a “demand letter” must be sent outlining the bills that have been denied and specifically stating what is owed. This must be filed with the representative of the insurance company that they have designated for this purpose. It gives the no fault carrier a 30 day window in which to cure the non-payment with only a $250 penalty. Once the timeline has expired, a PIP suit could be filed and if the plaintiff is successful, then in that event the insurance company would have to pay the attorney’s fees for the claimant, as well as any costs expended.
8. If a person is injured and they don’t own a motor vehicle, can they still receive Florida PIP benefits?
The answer usually is yes. The statute specifically addresses this. If the injured party does not own a motor vehicle, then the first in line potential no fault carrier would be any car insurance that has been provided to a resident relative of the injured party. If the injured party does not have a resident relative, then in that event the PIP statute indicates that the claimant could receive PIP benefits from the car that he or she was in at the time of the accident. If the claimant is a pedestrian, with no PIP insurance available from any source, they would be able to get the no fault from the actual car that struck them.
9. Is there a loophole in the no fault law that you do not like?
Yes. If you are out of the state of Florida and you are not in your own vehicle, then you would have no no fault benefits available. Furthermore, you cannot use the no fault coverage of the car that you are in, presuming it was a non-family vehicle.
10. Was there anything favorable to the citizens of Florida that was added to the 2013 amendment of Florida’s no fault law?
Yes, we have always had a $5,000 death benefit. This pretty much would pay for a basic funeral up front upon the death of any person from a car accident regardless of fault. According to the 2013 amended statute, that $5,000 death benefit would not reduce PIP coverage, so $10,000 would still be available for any medical bills incurred by the decedent before he or she passed.
11. Do you have a practice tip for fellow lawyers in the community about how to possibly maximize PIP benefits?
One tip would be that if you have a claimant that is injured in an auto accident while on the job, he or she obviously may pursue worker’s comp benefits. Sometimes my clients go through the authorized worker’s comp physician, but if they want to see someone not authorized by worker’s comp, PIP will pay. Furthermore, at the end of the case if the case is settled and you have to pay back worker’s comp regarding their subrogation right, you can then seek reimbursement from PIP for 80% of any monies paid by worker’s comp.