No-Fault or No Thank You?: DC’s PIP Laws
August 1, 2017 By Adam D. Perrelli
For many motorists injured in traffic accidents, Personal Injury Protection (“PIP”) provisions in their own motor vehicle insurance policies can lessen the blow of unexpected medical bills or time missed from work. Known in some states as “med-pay” and in others as “no-fault,” these benefits serve to assist an injured party whether or not that party was responsible for the accident at hand.
Beginning in 1982 with the passage of the District of Columbia’s Compulsory/No-Fault Motor Vehicle Insurance Act, it was required that all sellers of motor vehicle insurance within Washington, DC must offer PIP coverage to customers. The purpose of the Act was to provide protection for drivers in the District from uninsured motorists, who made up nearly 40% of DC’s drivers in the early 1980s.
While collecting PIP benefits from a DC policy may seem like an easy decision, it is actually quite complicated, and the wrong move can result in an injured party losing their right to sue except in extremely limited circumstances. §31-2405(a) of the DC Code states that “a victim shall notify the PIP insurer within 60 days of an accident of the victim’s election to receive personal injury benefits.”
Under the same section of the DC Code, an individual who elects to receive PIP benefits also forfeits their right to sue the person who caused the accident, unless one of the following factors is present:
- substantial permanent scarring or disfigurement;
- substantial and medically provable permanent impairment which significantly affects the ability of the victim to perform his or her professional or daily activities;
- a medically provable impairment that prevents the victim from performing all daily activities for more than 180 continuous days; or
- the medical and rehabilitation expenses of a victim or work losses exceeds the amount of PIP benefits available.
It is important to note that Maryland’s Court of Special Appeals has held, in Sherrod v. Achir, that this “lawsuit restriction” of the DC Code does not apply to a collision that occurs in Maryland involving a DC-insured plaintiff and a Maryland-insured tortfeasor.
Finally, using PIP benefits from a DC policy can open an injured party up to subrogation from the PIP insurer. In Hubb v. State Farm (which also involved a Maryland accident and a DC-insured plaintiff), the DC Court of Appeals decided that a plaintiff who had been awarded over $25,000 in PIP benefits, then settled with the at-fault driver for $60,000, was liable to reimburse State Farm, the PIP insurer, for the PIP benefits paid. These PIP liens can wipe out a verdict or settlement, and lead to major complications for plaintiffs and their counsel.
The lesson here is that the decision whether or not to use DC PIP benefits should not be made without consulting a lawyer who has experience in this area. The attorneys at DeCaro Doran can explain the pros and cons of PIP benefits in the District of Columbia, and how such a claim may apply to the defense of subsequent personal injury suits.