PIP is mandatory insurance. One must go through one’s own car insurance under the PIP coverage for payment of medical bills at the rate of 80% up to $10,000. That means even if someone else is at fault, that defendant is not required to pay for those medical bills that PIP would otherwise cover.
When I first started doing insurance/injury work in Florida in the late 1990s, it was routine for insurance companies NOT to pay PIP. This would often leave my client in the unfortunate position of owing medical bills as PIP did not pay and the defendant was not obligated to pay. The only alternative was to sue the client’s insurance company. This is called a PIP suit. Typically, the amounts at issue were not very large, usually somewhere between $2000 and $10,000. Typically, the client would not want to or have the money to pay the court costs or fees up front on an hourly basis. Additionally, a traditional contingency of 33 1/3 to 40% would not be enough of an incentive for the attorney to pursue what would often be a difficult and drawn out litigation, especially in light of the fact the attorney would have to front the costs. And regardless, either of these options would leave the client less than whole as fees would be coming from payment for medical bills. Luckily, Florida law mandates that when an insured sues an insurer in PIP cases, the insurer must pay the insured’s fees and costs if the insured wins the case. To make the cases feasible for the attorney, the fee would be structured on an hourly contingency which, simply stated, requires the insurance company to pay the insured’s attorney for the amount of time spent on the case.
Due to the influence of the car insurance companies, the Florida legislature is considering legislation that would cap the attorney fees allowed to be collected by the insured’s attorneys. The claim of the insurance companies is that this will lower insurance payouts. In reality, this would create an uneven playing field whereby the insurance companies can deny PIP benefits (as they did many years ago), let them pay their defense lawyers an unlimited amount of fees while greatly restricting the ability of the insured to hire an attorney and have their medical bills covered from an accident. The insurance companies will profit greatly and the Florida consumer will likely lose if this legislation passes.
About Lyle Koenig, Esq.
Attorney Lyle Koenig has handled hundreds of personal injury and insurance claims during his career. His practice focuses on personal injury cases that include automobile accidents (truck, motorcycle, pedestrian), slip-and-falls and product liability. He also handles cases involving private disability insurance claims, personal injury protection benefit claims and insurance coverage disputes.