Ten thousand dollars can go quickly after a crash. Two questions come up constantly near the end of a PIP claim: what happens when the money runs out, and what has to happen before anyone can sue over an unpaid bill.
Exhaustion, in plain terms
A PIP policy has a limit. Once the insurer has properly paid benefits up to that limit, the policy is said to be "exhausted," and the insurer generally has no obligation to pay more PIP benefits on that claim.
First come, first served
In general, claims are processed in the order they are received. That means if one provider's bills arrive and are paid first, a provider who submits later may find the benefits already used up. Florida courts have dealt with a lot of litigation about exactly when an insurer may pay claims through to exhaustion, and the details can matter.
Why this matters to patients
- Providers who bill late may not be paid by PIP.
- Your out-of-pocket exposure can depend on billing order.
- Health insurance or other coverage may pick up after PIP is exhausted, depending on your policies.
When is a PIP bill "overdue"?
Under the PIP statute, benefits are generally due when the insurer receives written notice of the covered loss and the amount, and they become overdue if not paid within 30 days after that notice. Overdue benefits carry statutory interest.
The pre-suit demand letter
Before anyone files a lawsuit over unpaid PIP benefits, Florida law requires a written demand letter. Think of it as a formal "last call" that gives the insurer a chance to fix the problem without a lawsuit.
What the letter must include
The statute requires specific information, including:
- The name of the insured and the claim or policy number, if known
- The name of the provider and the dates of treatment
- An itemized statement of the exact amount claimed
What the insurer can do
After receiving a proper demand letter, the insurer has 30 days to pay the overdue amount, plus interest and a small statutory penalty. If it pays within that window, the dispute generally ends there. If the letter is defective or the claim wasn't actually overdue, that becomes a defense in any later lawsuit.
Why I find this area interesting
PIP litigation is detail work. Dates, fee schedules, billing codes and notice requirements decide cases. A clean, well-organized file is often the difference between a quick resolution and a year of motion practice.
The takeaway
Submit bills promptly, keep proof of what was sent and when, and remember that a proper demand letter is required before a PIP lawsuit. For advice about a specific claim, talk with a Florida-licensed attorney.