Did I Waive PIP?

Back in the old days from 1972 to 1989, insurance companies had to provide PIP insurance with Maryland car insurance policies that provided some measure of coverage for lost wages and medical bills after a car accident regardless of fault. Then the car insurance companies wore down the Maryland legislature and PIP was no longer a requirement. The grand compromise was that car insurance companies would “offer” PIP, but that the insured could waive PIP coverage.

Please note, I’m making all of this up. I was in college at the time and I’m sure even people who were there don’t remember exactly how it happened. But I will bet you it happened just like that.

Anyway, to waive PIP in Maryland, the waiver must be both affirmative and written (although electronic signatures count as “written” in 2010). So a Maryland car insurance company must have a waiver to deny coverage after a car accident. If it has the waiver, it wins. If it does not, it loses.

Here is what is tricky. There is no indication as to whether the waiver applies to car insurance policies that automatically renew every year. On one hand, a renewal is just a continuation of the old policy. On the other hand, the insurance company is required to get a PIP waiver when it “sells” the insurance. Arguably, it is “selling” insurance each time it issues a new policy. Does the existing PIP waiver carry over with each automatic renewal or do you have to sign a new waiver for each renewal period?

You would think this would be a well-settled area of Maryland law since this has been the law for 21 years. The problem is that Maryland accident lawyers rarely file PIP claims because most lawyers process PIP claims at no charge and the amount at issue does not warrant the lengthy trip to the Maryland Court of Appeals.

What Is the Deal with PIP Insurance?

In Maryland, Personal Injury Protection (PIP) insurance is a type of car insurance that provides medical coverage for drivers and passengers in the event of an auto accident.  You may also hear people call it no-fault or limited no fault insurance.  PIP insurance is required by law in many states and provides coverage regardless of who is at fault in an accident. Despite its benefits, Maryland law lets you waiver PIP insurance and some drivers do just that.

Waiving PIP Insurance in Maryland

In Maryland, drivers have the option to waive PIP insurance coverage when purchasing an auto insurance policy. To do so, drivers must sign a waiver form that indicates they understand the risks and benefits of waiving PIP insurance. Drivers who waive PIP insurance must still purchase liability insurance, which covers damages and injuries to other drivers and passengers in the event of an accident. To waive PIP in Maryland, like I said above, you have to expressly waive it. Or you have it.

Reasons for Waiving PIP Insurance

One of the main reasons drivers waive PIP insurance coverage is to save money on their car insurance premium. PIP insurance is not that expensive but when you are looking to cut costs, it is was easy one.   Victims also rationalize that they have health insurance so they do not need PIP.  Also, it is not like not having insurance on your car or house.  The downside when you choose wrong on PIP insurance is not grave.

Benefits of PIP Insurance

Despite the added cost, PIP insurance provides several important benefits to drivers and passengers in the event of an accident. One of the main benefits of PIP insurance is that it provides medical coverage regardless of who is at fault in an accident. This means that even if a driver is found to be at fault in an accident, they and their passengers will still be covered by PIP insurance.

PIP insurance also provides coverage for a wider range of medical expenses than liability insurance, including hospital and rehabilitation costs, lost wages, and other out-of-pocket expenses. In addition, PIP insurance often provides coverage for medical expenses more quickly than health insurance, which can be particularly important for drivers and passengers who are injured in an accident.

Risks of Waiving PIP Insurance

Drivers who waive PIP insurance coverage take on several risks, including the risk of financial responsibility for medical expenses in the event of an accident. If a driver is found to be at fault in an accident, they will be responsible for covering any medical expenses incurred by the other driver and passengers involved in the accident.

In addition, if a driver is injured in an accident and does not have PIP insurance, they may need to rely on their health insurance to cover their medical expenses. However, health insurance may not cover all of the medical expenses related to an auto accident, and drivers may be responsible for paying deductibles, copays, and other out-of-pocket expenses.