What Happens When Your Client Causes an Accident and Gets Injured?

When we think of insurance, we often focus on liability to others—the idea that we are protecting against the harm we might cause to someone else. However, a common mistake for agents is overlooking how to protect the client when they are the ones causing the accident and getting injured. To truly provide the best coverage for your clients, you first need to understand their health insurance out-of-pocket maximum. That's right—did you know that auto insurance coverage should be coordinated with your client's health insurance? Let me explain why.

Understanding Medical Payments and Personal Injury Protection

When an accident occurs, and your client is the one injured, a different type of coverage comes into play. This is where Medical Payments (MedPay) or Personal Injury Protection (PIP) coverage, depending on the state, is essential.

A Real-Life Scenario

Imagine a client driving on a road with a big hill and a traffic light at the bottom. The client was driving up the hill, not paying close attention, and didn't realize that traffic was backed up all the way to the crest. When they reached the top, they had only a split second to react and ended up slamming into the back of another car at 40 miles per hour.

Now, let's put you in this scenario. You are the driver of the vehicle that was hit, and I am the one who caused the accident. You're feeling the effects of whiplash and stiffness in your neck, so you seek advice from a medical provider. The doctor recommends physical therapy, medical massages, chiropractic visits, and several other treatments to ensure your recovery.

In this case, your PIP coverage pays out first, even though I caused the accident. If your medical bills exceed your PIP limit, my liability coverage will step in to cover the rest.

But what about me—the person who caused the accident? If I were injured, say my femur was broken due to the impact, and I needed emergency surgery and months of rehab, the question becomes: Who pays for my medical bills?

Not many people know the answer to this, so let's break it down.

How Medical Bills Are Paid After an Accident

1. First, PIP or MedPay (depending on the state) covers the initial medical expenses.

2. Second, personal health insurance takes over once the PIP or MedPay limits are exhausted.

In this scenario, due to the extent of my injuries, my health insurance out-of-pocket maximum was reached. I had a high deductible plan with an out-of-pocket maximum of $12,000. However, my PIP was only set at $3,000, leaving me with $9,000 in medical bills that I am responsible for.

So, who am I upset with? You guessed it—I would be upset with my insurance agent. Even though the insurance company paid the $3,000 as per the PIP coverage, I am still left with a substantial amount to pay out of pocket due to the accident. As a result, I would feel that my agent failed to fully protect me at the time of the accident.

How You Can Better Protect Your Clients

The solution is simple: get in the habit of educating your clients and matching their PIP or MedPay coverage to their health insurance out-of-pocket maximum. This way, the PIP or MedPay can cover those deductibles and out-of-pocket costs associated with their health insurance plan. By doing this, you ensure that your clients are financially protected if they cause an accident and are injured.

If you want more tips like these to help you and your agency write better policies for your clients, comment the word PIP, and we'll connect for a top performance call to discuss ways we can help you protect your clients effectively.