The One Where PIP Is Waived

Episode 2 – The One Where PIP is Waived

In 2018, Utah’s legislature amended Utah Code 31A-22-305.3(6) dealing with underinsured motorist (UIM) reimbursement.  This involves the injured parties’ own insurance company. As you know, PIP is paid by the injured parties’ insurance company.  The amended statute eliminates the right of reimbursement for the first-party insurer and reads, in pertinent part,

An underinsured motorist insurer does not have a right of reimbursement against a person liable for the damages resulting from an injury-causing occurrence if the person’s liability insurer has tendered the policy limit and the limits have been accepted by the claimant.

Also found in §31A-22-309(6) which reads as follows in relevant part:

“(b) There shall be no right of reimbursement between insurers under Subsection (6)(a) if the insurer of the person who would be held legally liable for the personal injuries sustained has tendered its policy limit.

As a practical matter, this means that if you receives the policy limit from the at-fault provider, the patient potentially receives $3,000 (in most instances) of additional benefit to their case, as the PIP does not need to be reimbursed. It is important as a provider to understand the “tension” that insurance companies have in their decision-making process of whether to offer the policy limits or not.