What To Do when Your No-Fault PIP Carrier Won’t Pay

Every auto insurance policy sold in Utah includes no-fault personal injury protection (PIP) coverage. This includes at least $3,000 for reasonable medical bills, $20 per day (up to a year) for household services and up to $250 per week for lost wages (up to a year — unless you waived this benefit). See Utah Code 31A-22-307. For those injured in a car accident who are out of work, these meager benefits can be pretty valuable. At a minimum, they can help defray lost income or supplement what workers’ comp might be paying them. If you received a full year’s worth of PIP benefits, it would total $23,300.

Qualifying for Benefits 

Before I go into how to pressure the insurance company to pay benefits, let’s touch briefly on how you can qualify – just to make sure you do. To qualify for the household services,

you need to provide your no-fault PIP insurance company with a form (that they usually provide, but you can create your own) that shows how other people are helping you around the house because of your injury. This could be a child mowing the lawn for you, a spouse doing your laundry, or the neighbor kid shoveling your walks. Basically, things that you would have done yourself but for you being down because of your car accident injury.

To qualify for lost wages, you will likewise need to certify by providing “reasonable proof” that you are missing work due to the car crash. The benefit is paid on account of your “inability to work.” See UCA 31A-22-307(1)(b)(i). A note from a doctor or clinic excusing you from work is generally required, as is proof of how much you normally make.

In my experience, the PIP carrier will pay automatically pay the $3,000 without argument. Unfortunately, they get stingy and really picky when you make a claim for household services and lost wages and will delay payment, hoping you give up or go away. Until now!

When PIP Payments or Overdue

Under the Utah statute 32A-22-309(5), these PIP benefits are overdue if they are not paid within 30 days “after the insurer receives reasonable proof of the fact and amount of expenses incurred during the period.” Did you notice I italicized the “reasonable proof” part of the statute? This is because the insurer will usually claim that they did not receive reasonable proof of the need to be off work and the actual amount. Therefore, when you submit your claim for lost wages, make sure you provide the proof in the form of a doctor’s note excusing your form working AND proof of how much you usually made. If you provide this documentation, then you have complied with the statute and they should pay you. However, you can’t force them to do the right thing and pay you, and so if you’re at this point and they refuse to pay, you need to go to the next step laid out below.

Taking It to the Next Level

The statute states that an insurance company can withhold PIP benefits only if the claim is not supported by “reasonable proof.” In application, we see the insurance company paying a portion of lost wages and/or household services and then cutting off additional payment based on their assertion that the claimant can work or that household services are no longer warranted. Despite a doctor’s note in the file, they may claim that the crash was not serious enough to cause you to have to be off work for an extended period of time. They may even say that they want you to be seen by one of their paid opinion doctors, who we know will almost always say that you can work. The statute, however, does not allow the no-fault PIP carrier to withhold benefits based on these reasons.

Penalties to the Carrier For Not Paying

If it’s determined that the no-fault insurance company has wrongfully withheld benefits, then they are obligated to not only pay those benefits which are past due, but to also pay interest of 1.5 percent a month (18% annual). Additionally, if you are forced to file suit against your own insurance company for not timely paying benefits, you are also entitled to “reasonable attorney fees” as well. See UCA 32A-22-309(5)(d). The action against them would be based on the contract you have with them, considered a “first-party” contract. The claim, in essence, would be a breach of contract claim, that they promised to provide these benefits in the event of an injury event and they failed to do so. Before you get to that point where you hire an attorney to bring this kind of action, a strongly-worded letter should be sent to educate them as to what your rights are to receive PIP benefits.

Sample Letter to Send

One thing that I have learned over the years is that you can’t force an insurance company to do the right thing if you have not filed suit. If suit is filed, and you are justified in filing suit, they will usually see the handwriting on the wall and cave in. Before hiring a lawyer to bring suit against your carrier (or even if you have already retained an injury lawyer), the following is a letter that will hopefully make the insurance company reconsider their position.

Dear Adjuster:

As you may know, a consumer who is entitled to PIP benefits has a right to receive those benefits if they have otherwise satisfied the requirements contained in Utah Code 32A-22-309(5). To receive lost wage benefits, a consumer need only show that: (1) they are receiving these benefits on account of an auto accident, (2) a doctor has released them from work for the period they are claiming benefits and (3) that the money they would usually make is established with paycheck stubs or other “reasonable proof.” If a consumer is making a claim for household services, reasonable proof to support this claim would include: (1) a ledger detailing the work that others are doing on their behalf and (2) a note from their doctor limiting the work they can do.

On [insert date], I provided [insurance company] the items required above to support my request for the payment of benefits from [date] to [date]. These supporting documents are attached as Exhibit 1. To date, however, [insurance company] has paid none of these requested benefits for this time period and is currently overdue by [number of days] days. This is a violation of the Utah Insurance Code.

I therefore request and demand that [insurance company] immediately pay these overdue benefits, as well as the statutory rate of interest on these overdue amounts, to avoid me having to bring suit to enforce my rights under my contract with you.

Thank you for your prompt attention to this matter.

Sincerely, …

I hope you find this information helpful. If you need any additional information on this topic, please give us a call.

Ron Kramer is an attorney practicing injury law in West Jordan and throughout Utah.