If another driver caused your Kentucky car accident, you may be surprised—and frustrated—to learn that your own automobile insurance company will be initially responsible for paying the first $10,000 of your medical bills. It is the law, and it is automatic in Kentucky, assuming the vehicle you were operating or riding in was properly insured. Additionally, as your car wreck lawyer, I am going to use your health insurance, including Medicaid or Medicare, to pay the medical bills from your car accident. I know it does not make a lot of sense, as you did not cause the car wreck, but let me explain.
A common question I hear is: “Why should my insurance pay anything? The other driver caused the wreck.” The answer comes from Kentucky’s Motor Vehicle Reparations Act and Kentucky’s system of Personal Injury Protection benefits, commonly called PIP or Basic Reparations Benefits; most commonly referred to as no-fault benefits. Think of no-fault benefits like automatic health insurance on the people in your vehicle up to $10,000 each. Yes, that is a big oversimplification, and it does not address optional no-fault benefits and/or using no-fault benefits to recover items such as lost wages; however, that “health insurance concept” is the general idea of no-fault or PIP benefits.
But using your own PIP benefits does not mean you caused the accident or that you are somehow at fault for the car wreck. It also does not mean the other driver gets a free pass, as his insurance company will ultimately have to reimburse your insurance company for any no-fault benefits they had to pay for your medical treatment. And it does not prevent you from pursuing a personal injury claim for pain and suffering, against the driver who caused your wreck.
It is simply how Kentucky law has established the initial payment of certain medical expenses following a motor vehicle accident, with the central idea being that you should not have to prove fault on the other driver to get medical treatment.
What Is Kentucky PIP Insurance?
Unless PIP coverage has been properly rejected, Kentucky automobile policies automatically provide at least $10,000 in Basic Reparations Benefits. Moreover, if the car wreck happened in Kentucky and even if you had car insurance from another state, you are entitled to Kentucky no-fault benefits. The bottom line is that if the car wreck happens in Kentucky, we can get you no-fault coverage as long as the vehicle you were riding in was insured.
These benefits can be used for accident-related expenses such as medical bills and lost wages.
Most importantly, PIP benefits are generally available without regard to who caused the accident. That is why Kentucky is called a “no-fault” state. But the term “no-fault” is often misunderstood. It does not mean nobody is at fault for your accident. In fact, no-fault benefits in no way address fault, a.k.a. liability, for the car wreck.
If another driver ran a red light, rear-ended you, crossed the center line, or otherwise caused your collision, that driver can still be legally responsible for the injuries and damages caused by the wreck. They are just responsible for any damages that are not paid under no-fault insurance. Only at the end of your case would a no-fault carrier recover what they paid from the at-fault driver’s insurance carrier, known as a PIP subrogation claim.
“No-fault” primarily describes how certain benefits, including medical expenses and lost wages, are paid by your own automobile insurance up to $10,000, no matter how the wreck occurred.
Why Doesn’t the At-Fault Driver’s Insurance Just Pay My Medical Bills?
Generally, the liability insurance company for the driver who caused the wreck will only pay your injury claim, which your medical bills are part of, when you are done treating, not you as you receive treatment. Think about it. A liability carrier does not want to pay for your physical therapy for two months and then be told that you need surgery as well. Rather, they want to preserve all their legal defenses to strongly argue that your injuries, including your treatment and the need for surgery, were not the result of the car wreck; but rather, some pre-existing condition you suffered from. This is why we have to use no-fault insurance and health insurance to get your medical bills paid during the claim process.
Kentucky PIP benefits provide a source for payment of those expenses while your claim against the at-fault driver is pending.
That distinction is important:
Your PIP claim and your bodily injury claim against the at-fault driver are two different things that are really unrelated to each other. This is why if you caused the car wreck, you could still have a no-fault claim to pay for your medical treatment but would not have a personal injury claim against the other driver, since you could not prove they were at fault for the car wreck.
Does Using My Own PIP Mean I Am Making a Claim Against Myself?
No. Using benefits that you purchased under your own insurance policy does not make you responsible for the accident. You paid for this coverage. Kentucky law provides these benefits to help pay certain losses following a motor vehicle accident regardless of fault.
Meanwhile, your claim against the driver who actually caused the collision can continue.
Your insurance company may have its own rights to seek reimbursement from the responsible insurance company. That is an issue between the insurance companies and does not mean that you were somehow at fault because your PIP coverage was used.
Should I Automatically Use All $10,000 of My PIP to Pay Medical Bills?
Not necessarily.
This is where the issue becomes more complicated—and where simply knowing that you “have $10,000 in PIP” is not enough.
How PIP benefits are used can sometimes affect how much money an injured person ultimately receives from a settlement.
For example, there may be circumstances where health insurance should be used to pay certain medical expenses while some PIP benefits are preserved for other losses, including lost wages.
There can also be significant differences between the amount a medical provider originally bills and the amount that must ultimately be paid after health insurance adjustments, contractual reductions, liens, or other considerations.
As a result, automatically allowing every medical provider to bill and potentially exhaust your PIP benefits may not always produce the best financial result for you.
Can I Tell My PIP Insurance Company Which Bills to Pay?
Kentucky law gives an injured person important rights concerning the payment of PIP benefits.
An injured person can direct or reserve PIP benefits, rather than simply allowing medical providers to consume the entire available benefit as bills arrive.
This can be particularly important when someone is missing work because of the accident or when your Emergency Room treatment is more than $10,000.
Once PIP benefits have been exhausted paying medical providers, those same benefits are no longer available to replace lost income, prescription reimbursements, etc. Yes, they become part of your personal injury claim but, on average, you won’t be resolving your personal injury claim until at least six months after the car wreck.
That is one reason I want to know early in a case what insurance coverage exists, what medical treatment is occurring, whether the client is missing work, whether health insurance is available, and how the client’s PIP benefits are being used.
These decisions can matter later.
What If My Medical Bills Are More Than My PIP Coverage?
This happens frequently, and this is why I recommend you immediately RESERVE your PIP coverage after a car wreck until we can see how much your EMS and Emergency Room bill total.
Kentucky’s basic PIP benefit is generally $10,000, and a significant accident can generate more than $10,000 in medical expenses very quickly.
As your car wreck attorney, I can use both your health insurance and your PIP coverage to pay your medical bills. However, PIP is a versatile insurance that I can use immediately after a car wreck and for other items such as lost wages, prescription reimbursements, and co-pay reimbursements. Once PIP is exhausted, it is gone. This is why I encourage a phone call to me early on so we can make sure your PIP does not get used up too quickly.
But another important question then arises:
What happens if the value of your injuries exceeds the amount of liability insurance available from the driver who caused the wreck?
That is when Underinsured Motorist coverage, commonly called UIM, can become extremely important.
This is why I believe a Kentucky car accident claim should be approached as more than simply asking, “What are my injuries worth?”
You also need to ask:
How much insurance coverage is available?
How should the medical bills be paid?
Should PIP benefits be preserved?
Is health insurance available?
Are there medical liens or reimbursement claims?
Is there UM or UIM coverage?
Are there additional insurance policies or responsible parties?
And most importantly, after everything is paid, how much of the recovery will actually go to the injured person?
The Other Driver Can Be at Fault Even Though Your Insurance Pays First
If there is one point to remember, it is this:
The fact that your insurance company is paying medical bills does not mean you caused the accident.
Kentucky’s PIP system determines who initially pays certain expenses. It does not necessarily determine who was responsible for causing the collision.
Those are two separate questions.
After handling Kentucky car accident claims for more than 30 years, I have found that understanding that distinction early can prevent considerable confusion—and sometimes prevent mistakes in how insurance benefits are used.
If you have been injured in a Kentucky car accident and have questions about PIP benefits, medical bills, lost wages, health insurance, UM/UIM coverage, or the insurance available from the driver who caused your wreck, call Desmond Law Office at 502-609-7657.
When you call my office, you deal directly with me. We can look not only at what your injury claim may be worth, but also at how the available insurance and medical payments should be handled in an effort to maximize what you ultimately recover.