"No fault insurance" describes any auto insurance system that both requires drivers to carry insurance for their own protection, and limits their ability to sue other drivers for damages. Under no fault laws, your auto insurance company will pay for your damages (up to your policy limits), regardless of whom was at fault for the accident. Any other drivers involved will be covered by their auto insurance policies.
Under a pure no fault system, drivers would be completely covered by their own policy, and would be barred from ever suing another driver for damages. No state, however, uses a pure system. Florida actually use parts of both the no fault system and the standard liability system (under which you're financially responsible for the cost of damages you cause). Florida still permits lawsuits in certain cases.
The primary benefit to no fault insurance is that it guarantees every driver immediate medical treatment in the event of an accident.
The actual no fault part of your auto insurance policy is usually called personal injury protection, or PIP. But parts of the policy may come under different names (like OBEL, for "optional basic economic loss").
The Personal Injury Protection (PIP) law (specifically, Florida Statute 627.736[1]) requires every insurance company writing PIP policies to pay the following medical benefits following an automobile accident:
Eighty percent of all reasonable expenses for necessary medical, surgical, x-ray, dental, and rehabilitative service, including prosthetic devices, and necessary ambulance, hospital, and nursing services. Such benefits shall also include necessary remedial treatment and services recognized and permitted under the laws of this state for an injured person who relies upon spiritual means through prayer alone for healing, in accordance with his religious beliefs.
Even though not mentioned in the statute specifically, the appellate courts in Florida have held that the cost of transportation incurred in connection with reasonable and necessary medical treatment is a reimbursable medical expense.
Automobile accident patients may also recover PIP benefits for replacement services - whatever ordinary services they could do for themselves but can no longer do as a result of injuries sustained in an automobile accident.
Medical Payment Coverage is separate and distinct from Personal Injury Protection benefits. Whereas the PIP benefits will pay only 80 percent of the incurred medical expenses, Medical Payment Coverage will pay the remaining 20 percent of the incurred medical expenses. Should the PIP coverage be exhausted (the full $10,000 being paid), the Medical Payment Coverage will begin paying 100 percent of the incurred medical expenses until such coverage is exhausted.
Since the initial No-fault Insurance legislation, insurance companies have been permitted to offer an array of optional deductibles. In 1982, the Florida legislature reduced the optional deductibles to amounts of $250, $500, $1,000,and $2,000.
Under Florida Statute 627.739(1), an individual may elect a deductible on PIP coverage to apply to the individual alone or to the individual and dependent relatives residing in the same household. The deductible DOES NOT apply to any other person covered under the policy (i.e. passenger who is not a dependent relative, pedestrian or bicyclist).
The amount payable by the insurance company when the PIP Policy carries a deductible is computed by multiplying the total medical expenses by 80 percent and thereafter subtracting the deductible. Two examples of calculating PIP benefits when there is a deductible are shown below:
Example No.1
Total Medical Expenses:$100
Percentage payable under PIP statute:80 percent
Benefits applied to deductible:$80Example No.2
Total Medical Expenses:$10,000
Percentage payable under PIP statute:80 percent
Benefits due but for the deductible:$8,000
Less deductible:$2,000
Benefits payable:$6000
It is important to note that the Florida Supreme Court has held that the maximum payout of an insurance policy carrying a $2,000 deductible is $8,000 and not the statutory $10,000 since the PIP limits themselves have been reduced by the deductible amount.
Whenever the physical or mental condition of an insured person covered by Personal Injury Protection (PIP) insurance is "material" to any claim for benefits, the insurance company can require the patient to submit to an independent medical examination (IME).
Unlike cases involving liability insurance, PIP insurance companies unilaterally select physicians of their choice. It is important to note that the right of the insurance company to obtain such examinations is an integral part of the No-Fault law. Accordingly, the patient/insured's refusal to submit to a PIP independent medical examination, even when such refusal is on the advise of counsel, may constitute a material breach of the insurance contract which may release the insurance company from further liability for payment.
If you've suffered as the result of an automobile accident or have more questions, contact one of our attorneys for a FREE CONSULTATION using the form below or by calling 1 (888) 77-GENET.
I understand that in visiting this site I am not entering into an attorney client relationship with Paul B. Genet or Stephen Haskins. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
Copyright © 2001-2005 Paul B. Genet, P.A.