Discussing Personal Injury Protection (“PIP”) benefits concerning Massachusetts’ compulsory No-Fault automobile insurance is a surefire way to induce glassy-eyed stares from most Bay Staters. From time to time, our blog will tackle PIP-related issues to highlight key court decisions and clarify confusing legalese.
Often, clients and readers unfortunate enough to suffer injuries in a motor vehicle accident (mva) wonder whether their mva insurance will compensate them for wages lost while they are sidelined. Under both the basic PIP definition found in M.G.L. c. 90, §34A and Part II, Section B of the standard automobile liability policy, an injured person out of work because of mva-sustained injuries may recover lost wages or salary or their equivalent for the self-employed. With an $8,000 ceiling and limited to the actual monetary loss caused by the accident, the injured insured may recover 75 percent of his or her average work wages for the year immediately preceding the date of the accident.
PIP benefits cover:
- Medical payments
- 75 percent of actual lost wages
- Reasonably incurred payments to others for ordinary and necessary services the injured party would have performed to benefit his or her household if not incapacitated by the injury. Pinnick v. Cleary, 360 Mass. 1, 6-7 (1971). An unemployed person may be compensated for lost wages to the extent he or she can prove the wages he/she would have received for work were it not for his/her injury.
Submitting a PIP Claim
Under M.G.L. c. 90, §34M, an injured person should present a claim to the PIP insurer “as soon as practicable after the accident occurs from which such claim arises” and within two years of the accident date. If lost wages, salary or equivalent is part of that claim, the insured must authorize the carrier to obtain information concerning all wages, salary or equivalent paid to the claimant by an employer in the year immediately preceding the accident date, and also empower the insurer to investigate whether any wage/salary continuance program may be available to reduce the loss suffered by being unable to work.
As M.G.L. c. 90, §34M entitles insurers to verify claims, it is unwise to be uncooperative with the insurer and downright foolhardy to inflate or otherwise misreport lost wage amounts. In Barkas v. Premier Ins. Co., 2009 Mass. App. Div. 262, for example, the carrier asked the self-employed individual injured in an mva in 2002 seeking lost wages for his 2002 tax return and a disability note from his treating physician. Four years elapsed before the doctor’s note was forthcoming and the tax records at issue weren’t introduced until a week before trial in 2008, prompting the court to find: “The failure to provide the necessary documents pertinent to the claim is a legally sufficient reason to deny the claim.”
In Charles G. Lee II v. Premier Ins. Co., 2009 Mass. App. Div. 151, in which the injured party listed as lost wages on his PIP claim twice his actual average weekly wage and exaggerated his actual losses by three- to fourfold in his trial testimony, the court found his conduct and lack of cooperation a justifiable basis for the carrier to deny his claim in its entirety, including medical expenses.
PIP benefits do not include payment for lost wages where the insured died instantly in a motor vehicle accident (Flanagan v. Liberty Mutual Ins. Co., 383 Mass. 195, 199 (1981)). Likewise, a woman with a pre- and post-accident work history who was a homemaker for a four-year period during which she was injured in an mva, was denied PIP reimbursement for loss of earning capacity as an injured homemaker. The court in Malave v. Allstate Ins. Co., 24 Mass. App. Ct. 901 (1987) held: “PIP benefits do not cover a loss of homemaker services except to the extent of reimbursing expenses reasonably incurred in replacing those services.”
Neither M.G.L. c. 90, §34A nor the standard insurance policy define what average weekly wage means in PIP claims, but courts have interpreted that it be calculated by dividing gross earned income by the number of weeks the injured party was employed in the 52-week period preceding the accident. DiGiacomo v. Metropolitan Prop. & Cas. Ins. Co., 2004 Mass. App. Div. 134.
A person injured in an mva may recover lost wages under PIP through a separate disability policy if it was purchased before the mva and covers such work disability, by suing an at-fault driver for the sum less the amount to which the injured person may recover under PIP, or through an employer lost wage and salary continuation program. In the latter instance, PIP pays the difference between the PIP-entitled amount and the actual sum recovered through the continuation program, or the PIP insurer may reimburse the wage continuation program directly if the continuation benefits are convertible into cash or retirement credit.
If you are injured in a motor vehicle accident, our office will help you navigate the PIP maze.