This video discusses how a recent injury client of ours made a mistake that cost her $10,000. The video explains the mistake, and the steps you should take to avoid making a similar mistake, specifically with regard to PIP (personal injury protection) and Med Pay (Medical Payments) insurance coverage.
So, what is this mistake? How does someone make a mistake in their injury claim that caused them ten thousand dollars? Well, the mistake is when she bought her insurance, she opted for medical payment coverage often referred to as MedPay but she did not get PIP or Personal Injury Protection coverage.
Why was that a ten-thousand dollar mistake? Well, simply put, in Texas, medical payments coverage is only used to pay medical bills and if you settle your injury claim with the other driver’s insurance company, you have to pay back to your own insurance company whatever amount they’ve paid you in medical payments coverage benefits. So what that means for our client is, because we were able to get a settlement from the other driver who was at fault, our client had to pay back ten thousand dollars of that money to her own insurance company because she had used the medical payments portion of her coverage to pay for some of her medical bills, which we advised her to do because she had the coverage and it would help her pay her medical bills, keep her bills from going to collections, and protect her credit rating.
So, it was definitely smart of her to use that, but what would have been better for her is if she would have purchased PIP coverage on her insurance policy instead of medical payments coverage. Why? Well, PIP coverage can be used for both medical bills and lost wages — medical payment coverage cannot. It’s only for medical bills. But what’s really better about PIP or Personal Injury Protection is that that money that’s paid to you under your PIP coverage does not have to be paid back — that’s right, it doesn’t have to be paid back.
So unlike medical payments coverage that does have to be paid back, PIP coverage doesn’t.
In fact, this mistake is so common, and so costly, that we’ve included a page or two about it in our FREE book “10 Deadly Mistakes That Can KILL Your Texas Accident Case.” You can get a free copy of the book here.
Had our client purchased PIP coverage or Personal Injury Protection coverage instead of MedPay, that ten thousand dollars that she had to pay back to her own insurance company would have been hers to keep — and that’s why we call it the “$10,000 mistake.” Having medical payments coverage instead of PIP coverage, that’s the ten-thousand dollar mistake.
Our recommendation is to always get the maximum that you can get on your PIP coverage before you decide to add medical payments coverage. Under state law, you should know that PIP coverage must be offered to you and you must reject it in writing. If you don’t reject it in writing, let’s say the insurance company messed up, they didn’t offer it to you or they don’t have proof that you rejected it in writing or rejected it online somehow, it’s likely that you will still have PIP coverage and that they’ll be obligated to pay you PIP coverage but it will probably be at the minimum available limits under your policy.
So I would highly recommend avoiding this ten-thousand dollar mistake that our client made, check your insurance policy, make sure that you have PIP coverage, and max out the PIP coverage before you add medical payments coverage. Otherwise, you could be making the same mistake our client made and end up paying back your own insurance company a lot of money that you would not have had to pay them back if you had PIP coverage.