Aug
10

Should my Car Accident Lawyer Take a Fee from my PIP?

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I have many people ask whether my car accident lawyer is permitted to take a fee from my Personal Injury Protection (PIP).  When you sign a contract to hire a lawyer for your auto accident case, the contract probably provides that the attorney’s percentage comes from “any and all” amounts that are collected.  Technically, this would include PIP benefits.  Whether a lawyer “should” take a fee from the PIP, however, is another question.  Rest assured that many auto accident lawyers in the Dallas / Fort Worth area will take a fee from the PIP as a matter of general practice.  There are auto accident lawyers who do consider waiving the fee from PIP as a courtesy, but that decision is usually made at the settlement stage of the case.  It would be wise to discuss this matter with your lawyer and get an idea of how the lawyer generally handles this issue.

Personal Injury Protection (PIP) is insurance coverage that you can purchase through your auto insurance policy.  In Texas, all auto insurance policies must provide for PIP unless the coverage is rejected in writing.  The minimum amount of coverage in Texas is $2,500, although you can purchase more coverage if you wish.  If you are involved in an auto accident, PIP will cover your medical bills as well as 80% of your lost wages, regardless of any fault on you.  There are, however, scenarios in which PIP is handled differently on your auto accident claim, and could effect how your lawyer decides to handle the PIP.

Let’s say that you are involved in an auto accident that was not your fault.  Your auto accident lawyer will not only make a claim against the other driver’s insurance company, but will also make a claim on your insurance policy for the PIP benefits.  This is because, more often than not, the amount of the settlement offered by the other driver’s insurance will most likely not be enough to pay your lawyer, your doctors, and also net some money in your pocket.  The PIP helps your auto accident lawyer settle the case by having more funds available to satisfy all the parties involved.  This is because the other driver’s insurance does not get any credit for the PIP.  For example, if your case is worth $10,000, then you would be able to collect $10,000 from the other driver’s insurance and still be able to collect the $2,500 in PIP benefits, for a total of $12,500.  Whether your auto accident lawyer should take a fee from the PIP portion depends on many circumstances as well as the general practices of your lawyer.

Now, let’s assume that the other driver did not have insurance.  If you had uninsured motorist coverage (UM/UIM), then your insurance company will pay the claim based upon what the uninsured driver would have been liable to pay under the law.  In this sense, your insurance company will step into the shoes of the insurance that the other driver should have had.  Your auto accident lawyer will, therefore, submit your case to your insurance company for PIP and UM benefits.  However, now your insurance company gets a credit for the PIP benefits.  For example, let’s assume again that your case is worth $10,000, and you have $2,500 in PIP benefits.  In this case, your PIP will pay $2,500 and your UM will pay $7,500 (“new money”), for a total of $10,000.  Therefore, your auto accident lawyer can justify taking a fee from the PIP because the PIP is actually part of the entire value of the case.

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If you are interested in this article, then chances are that you researching your options for hiring a car accident attorney.  If you are, however, using this site as a tool to handle your own case, then please do not make the mistake of thinking that articles like this are a substitute for hiring an experienced lawyer.  Here are some articles about the importance of getting an experienced personal injury lawyer to represent you in your case:

What is Personal Injury Protection (PIP)

Should I Hire a Car Accident Attorney?

Top 5 Do’s and Don’ts of a Personal Injury Claim.

Don’t Represent Yourself.

Call Now and personally speak with Robert C. Slim, Attorney at Law, about your car accident case.  You will get to consult with the lawyer for free  with no obligations.  And if you decide to hire Attorney Slim, his fees are collected only if and when there is a recovery in your case.

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