From time to time, I look at the ways that people find our website, and this month, someone found the website by a Google search asking whether a personal injury lawyer could take a percentage of a PIP settlement. I don’t think I’ve answered that question on the site, so I thought I would answer it here.
First, some background. Personal Injury Protection (PIP) is a type of coverage that a customer may purchase when the customer is buying auto insurance. Unlike liability coverage (which will pay for damage to someone else if the customer causes a wreck), PIP protects the customer. Like liability coverage, the customer buys an amount of PIP. If the customer buys it, then the minimum limit of PIP is $2,500, but the customer may buy much higher amounts. If that customer is in a wreck caused by someone else, then the customer’s PIP will reimburse the customer (up to the maximum limit that the customer purchased) for medical expenses incurred as a result of the wreck and for a portion of the lost wages that the customer suffers as a result of the wreck.
Back to the question: May a personal injury attorney take a percentage of a PIP settlement? Generally, the answer to that question is “yes,” as long as the fee agreement between the attorney and the client allows for the fee to be taken on the PIP proceeds. The attorney and the client should negotiate that issue up front.
Having said that, many personal injury firms (including ours) do not take a percentage out of a Personal Injury Protection payment. While insurance companies are making claims more difficult, the process is pretty straight forward, and we just don’t feel right taking a fee for that little bit of work.
The one exception to this for us is when we have to file suit against an insurance company to recover PIP benefits. But doing that is very rare, and when we do file suit, we seek an order from the court requiring the insurance company to pay the attorneys’ fees that our clients incur in bringing that suit. (In most cases, defendants are not required to pay attorneys’ fees to plaintiffs, but payment of PIP benefits under an insurance policy is one exception.)
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