When Do I Get My Maryland Personal Injury Protection [PIP] Benefits?
I’ve discussed in other articles that Maryland requires, unless affirmatively waived, that all vehicle owners with cars registered in Maryland secure Personal Injury Protection coverage. In the industry, this is often abbreviated as “PIP”. The coverage is a no-fault coverage. You are entitled* to the benefits if you are involved in a car accident that someone else, caused, you caused, or no one caused. The benefits are considered first party- meaning that they are your own insurance benefits for which you pay premiums. I’m often asked when the payments, particularly for lost wages, can be expected. There are two requirements. You, or your personal injury attorney, must ensure that the application and proof of lost wage, required by the insurance company have been submitted. Once that material is provided, the insurance company has 30 days to pay benefits to you.
If the insurance company fails to pay you within those 30 days, they owe you the lost wages, plus simple interest of 1.5% per month.
Some states have moved to a more aggressive enforcement mechanism where PIP benefits are not timely provided. Florida law, for example, provides that where benefits are not timely paid after the appropriate demand has been made, the insurance company may be liable for the amount not paid, plus penalties and interest, and may additionally have to reimburse attorney’s fees incurred in the collection of the unpaid PIP benefits. The law in some other jurisdictions has evolved as well, and these changes have had the effect of injured individual perhaps not having the same ability to hire counsel to collect relatively modest insurance benefits. Under current Maryland injury law, there is no such option. As an example assume that an inured person has a hospital bill of $500 that their Maryland PIP insurance company should have paid, but did not. If that person has to hire an attorney to take that case to court, their legal fees and costs would exceed $500. If there is no ability to recoup their attorney's fees and costs from the insurance company wrongly withholding benefits, that injured person may simply not be able to pursue payment of the bill, and ultimately, be responsible for it.
-This Article was updated by Eric Kirk on 8/6/19 and 11/3/20.
*The Assembly has recently enacted a change in this process. Marylanders now have the option of carrying less insurance. An insured may now reject personal injury protection altogether, under specific circumstances. See Insurance Article, Md. INSURANCE Code Ann. § 19-506.1.