This question was posed to me in response to a prior blog about paying back PIP benefits.
In general, PIP and Health Insurance benefits have to be paid back at the end of a personal injury case.
In short, the concern was why a consumer pays premiums for protection, and then when they get injured, has to pay it back. In other words, “What gives? I'm the one that got hurt.
Why Should My Insurance Company Get The Money?
It can definitely feel like everyone has their hands in the proverbial “pot” of your injury, and is asking for their share. I will note that PIP and health insurance do not necessarily have to be paid back, and you or your attorney can negotiate a reduction. The law may require that the insurance company waive its reimbursement, but that is highly dependent on the circumstances.
However, the question was why it has to be paid back. The short answer is that the law and the insurance policy require it. We want the person who is truly responsible to pay the damages. We don't want an at-fault person to escape responsibility just because an injured person had the foresight to buy insurance.
Paying Back PIP in Washington
Additionally, in Washington, the only person who has the right to bring a claim for medical expenses against the at-fault party and his/her insurance for the medical expenses. The insurance companies don't have a way to try and get their money back—although they may try to work around this problem, it's not done properly.
If you recover the medical expenses, which have already been paid by PIP, health insurance, or another source, the law does not want you to make a double recovery.
Stated another way, you already received a benefit from the PIP or health insurance by having them pay your bills. If you go and recover those bills from the at-fault party, you would have essentially received that benefit twice. So the law allows the PIP or health insurer to assert a lien against your recovery, and you would have to pay it back.
Because it can feel unjust at times, there are ways to reduce the amount you have to pay back, or even get the insurance company to agree to it, as I mentioned above. Whether you are eligible for that kind of reduction depends on the specific circumstances of your case. Talk to an attorney who practices in this area if you want to know whether you can get a reduction or waiver in your payback obligation.