PIP & Med Pay: What’s the Difference?

PIP (Personal Injury Protection) and Med Pay (Medical Payments) insurance are coverage terms that tend to be used interchangeably. My experience is that PIP usually refers to first party coverage for the owner of the policy (the driver of his or her own car), his or her passengers, and pedestrians. This type of coverage includes medical payments, lost wages, and disability. Med Pay usually refers to medical payments coverage in addition to liability coverage (and is available to first or third parties). Both PIP and Med Pay are paid without regard to fault.

Companies that pay PIP or Med Pay often request repayment by subrogation. These requests cannot be ignored. They usually can be dealt with favorably for our clients. Refusal to subrogate is based on the argument that our client has not been made whole. The key is to get the company which claims a subrogation interest to formally abandon the claim, or to set the matter for declaratory judgment.

It is no longer enough to get the company which claims a subrogation interest to reduce their claim. (In the past, one could rely upon the Arkansas Statute which recognized a 1/3 cost of collection fee to the plaintiff’s attorney for collecting the subrogation interest.)

If your client has no insurance of any kind, the client might qualify to receive Med Pay benefits under the defendant’s policy. This normally requires the client to sign and submit and affidavit of no insurance.

Finally, when negotiating an underinsured motorist claim (UIM), require that any offers made are to be in addition to a complete waiver of any subrogation interest.

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