One of the most annoying issues in insurance coverage is how PIP statutes in various states interact with one another. If a Massachusetts driver is injured by a Virginia driver in Florida, does PIP apply? Does the PIP tort limit apply? Does the PIP offset apply? Does the intercompany reimbursement scheme apply? What if a driver from Toronto injures a pedestrian in Massachusetts? (I mention the latter example because I represented a Toronto driver in just such a circumstance. We won on liability. The plaintiff's attorney later told me that if he had understood that the PIP offset would apply he would not have taken the case to trial because it would have lowered the potential damages by too much.)
I frequently receive calls from adjusters wondering if I can answer off the top of my head a question about the application of PIP to an interstate situation. I never can, because all the details matter and a change in details -- the home state of the other driver, for example -- can change the answer. It often requires extrajurisdictional research, and even then there is often no clear answer. If there is an answer, it will take a long time to figure out what it is, because PIP statutes are crazy hard to decipher and typically do not have a lot of case law interpreting their application to interstate accidents. And with very limited exceptions the most money that could ever be at stake, under the Massachusetts PIP statute, is $8000.00.
The Massachusetts Appeals Court recently applied notable common sense to an interstate PIP dispute.
David Allen was driving a car insured by Commerce under a Massachusetts policy when he was involved in a collision in Holyoke. Julio and Maria Alvarado were in the other car, which was insured under a New York policy by Peerless.
The Alvarados were injured and received no-fault benefits under the New York PIP scheme, which has a limit of up to $50,000 covering medical bills and lost wages.
Commerce sought a declaratory judgment that the PIP offset would cover the entire amount of PIP coverage the Alvarados received. The Alvarados argued that the Massachusetts PIP statute creates an exemption only for PIP benefits received from a Massachusetts insurance policy, not a New York insurance policy.
In Commerce Ins. Co. v. Alvarado, 83 Mass. App. Ct. 604 (2013), the court held that the objective of the Massachusetts PIP scheme is to avoid duplicative recovery. Very sensibly, the court held that Commerce is entitled to an offset for the benefits the Alvarados received from the New York policy. Even more sensibly, the court ruled apparently sua sponte that Commerce must reimburse Peerless for the PIP benefits the Alvarados received from Peerless.