“PIP” is an acronym for Personal Injury Protection. In Oregon, most all auto insurers (exceptions exist for some commercial drivers, for example) must provide medical coverage known as “PIP” in auto policies issued in Oregon. PIP is required no fault insurance provided by your own motor vehicle insurer.
PIP insurance coverage pays an injured party “reasonable and necessary” medical expenses of at least $15,000. This benefit currently expires ONE year after the accident. Check your policy to see if more PIP coverage is granted.
PIP is an insurance benefit paid from your own auto policy and is mandatory. Your auto insurer will have a reimbursement claim against the insurer for the negligent driver for the amount of medicals your auto insurer paid to you, the non-negligent party under PIP coverage.
Under Oregon law currently in effect (as of March 16, 2009), the PIP insurer is eligible for PIP reimbursement AFTER you, the injured party, is repaid lost ECONOMIC damages. This rule is often called the “make half” rule since ECONOMIC damages are only part of your damages from an accident. The other, often bigger part of your total damages, is known as NON-ECOMONIC damages.
The current “make half” reimbursement scheme described above is potentially very unfair to injured persons. Because, the “make half” rule allows for the possibility that you will not be paid NON-ECONOMIC damages should the bad driver’s insurance limits be insufficient to repay your PIP insurer as well as your NON-ECONOMIC DAMAGES.
A possible solution is working through the Oregon legislature. Working through the legislature, change can be made so that a person injured in an auto accident gets his or her ECONOMIC and NON-ECONOMIC before your PIP carrier is reimbursed for the medical care it paid on your behalf. This is known as the “make whole” rule and is law in many other states such as Washington.
Yesterday, Oregon House Bill 2325 passed the House Consumer Protection Committee by a 9-1 vote. This bill would change current law so that a non-negligent injured party receives ALL his or her damages (NON-ECOMONIC & ECONOMIC) before the PIP carrier is eligible for reimbursement. The bill would also extend mandatory PIP medical coverage from ONE (present) to TWO years. Next week the vote goes to the full House for a vote. The law has not changed yet, but this is a good start toward more fairness in Oregon’s auto insurance reimbursement laws.