8.2 Hawaii Personal Injury Protection (PIP), Source of Payment & the Tort Threshold

8.2 Hawaii Personal Injury Protection (PIP), Source of Payment & the Tort Threshold

Hawaii is a no-fault state for bodily injury from motor vehicle accidents. Every motor vehicle policy must provide personal injury protection (PIP) benefits (§ 431:10C-301(a)). In exchange, the law abolishes tort liability for accidental harm unless a threshold is met. The adjuster outline lists the obligation to pay PIP (§ 431:10C-304), PIP itself (§§ 431:10C-103.5 and 103.6), and the abolition of tort liability (§ 431:10C-306).

What PIP Pays (§ 431:10C-103.5)

PIP benefits are all appropriate and reasonable treatment and expenses necessarily incurred because of the accidental harm and substantially comparable to the requirements for prepaid health care plans. Covered services include:

• medical, hospital, surgical, professional, nursing and advanced practice nursing care;
• dental, optometric, naturopathic and chiropractic care;
• ambulance, prosthetic services, medical equipment and supplies;
• X-rays and psychiatric care;
• physical therapy prescribed by a medical doctor, occupational therapy, and rehabilitation; and
• therapeutic massage by a licensed massage therapist when prescribed by a medical doctor.

PIP benefits are subject to an aggregate limit of $10,000 per person. Insurers may offer additional coverage above that limit.

Basic PIP does not include wage loss, death benefits, funeral expenses or pain and suffering. Wage loss, death and funeral benefits are optional coverages the insurer must make available (8.1).

Treatment Caps and Fee Schedules (§§ 431:10C-103.6, 10C-308.5)

Other rules:

• PIP may include copayments and is subject to the utilization requirements of prepaid health care plans.
• Charges and frequency of treatment may not exceed those allowed by the workers' compensation supplemental medical fee schedule, except for emergency services within 72 hours after the accident (§ 431:10C-308.5).
• An independent medical examination is performed by a licensed Hawaii provider (unless the insured consents to an out-of-state provider) of the same specialty. The examiner is selected by agreement or, failing agreement, by the commissioner, arbitration or the circuit court.
• An insured may choose an optional managed care delivery (HMO or PPO) for PIP benefits if the insurer offers it (§ 431:10C-302.5).

Who Gets PIP, and From Which Policy

Right to PIP (§ 431:10C-303)

• For accidents in Hawaii, every person insured under the article, and the person's survivors, has a right to PIP for accidental harm arising from the operation, maintenance or use of a motor vehicle.
• For accidents outside Hawaii, PIP is available to insureds, and to the driver and occupants of an insured vehicle, but not of a vehicle regularly used to transport persons or property in business that is one of five or more commonly owned vehicles.

Persons Covered (§ 431:10C-304(1))

The PIP insurer pays providers, without regard to fault, for accidental harm to:

• any person, including the owner, operator, occupant or user of the insured motor vehicle;
• any pedestrian, including a bicyclist;
• a user or operator of a moped; and
• a user or operator of an electric foot scooter.

Motorcycle and motor scooter operators and passengers are not covered by PIP unless the policy expressly provides it. Motorcycles are not "motor vehicles" under article 10C.

Source of Payment (§ 431:10C-305)

Additional rules:

• No double recovery — no one may recover PIP from more than one insurer for the same accident.
• Secondary to workers' compensation — PIP is paid secondarily and net of workers' compensation benefits, subject to earnings-loss limits. If the workers' compensation carrier contests the claim, PIP pays and is subrogated.
• Temporary substitute vehicles — when a registered repair shop or licensed dealer lends a customer a substitute vehicle, the policy on the customer's car is primary. When the shop drives the customer's car during service or to verify repairs, the shop's policy is primary.
• Ineligible — occupants of a motor vehicle other than the insured motor vehicle (as to that policy), operators engaged in criminal conduct that causes loss, and motorcycle or motor scooter operators. They may still recover in another capacity under a different policy.

Paying PIP (§ 431:10C-304)

1. Pay within 30 days after receiving reasonable proof of the fact and amount of benefits accrued, and a demand for payment.
2. If denying in whole or part, notify the claimant in writing within the 30 days, with reasons, on the commissioner-approved form (copy to the provider).
3. If more documents are needed, send an itemized list within the 30 days (copy to the provider).
4. Benefits unpaid after 30 days bear 1.5% interest per month.
5. Benefits are paid as they accrue. Optional death benefits may be paid in a lump sum.
6. The insurer pays the claimant's reasonable attorney's fees and costs needed to collect PIP found due, separately from the benefits, unless the claim was unreasonable, fraudulent, excessive or frivolous (§§ 431:10C-304(5), 10C-211).

PIP deductibles of $100, $300, $500 and $1,000 may apply to the named insured's own claims (8.1). Disputes about PIP or other policy issues may be submitted to arbitration by filing a request with the circuit court clerk where the accident occurred. An arbitrator is appointed within 10 days under chapter 658A, and appeals go to circuit court (§ 431:10C-213).

The Abolition of Tort Liability (§ 431:10C-306)

What Is Abolished

For motor vehicle accidents in Hawaii, the article abolishes tort liability, with respect to accidental harm, of:

1. the owner, operator or user of an insured motor vehicle; and
2. the operator or user of an uninsured motor vehicle who had no reason to believe it was uninsured.

The Four Exceptions (Tort Threshold)

Tort liability is not abolished if:

In computing the $5,000 threshold, include PIP benefits incurred, paid or payable (including similar benefits under social security, workers' compensation or public assistance), deductibles and copayments, and amounts paid by health insurance for a person not entitled to PIP (up to the PIP fee schedule). Capitated HMO services are valued at the fee schedule. Do not include optional benefits above the basic $10,000 PIP limit. The party against whom the presumption runs must rebut it.

Example: A Waipahu driver is rear-ended, incurs $4,200 of medical bills under PIP, and fully recovers. The threshold is not met, so she cannot sue the other driver for pain and suffering. If her PIP-covered medical bills reach $5,000, she may pursue a tort claim for general damages.

What the Abolition Never Covers

The article does not limit:

• liability for property damage — vehicle damage claims proceed under ordinary negligence law (§ 431:10C-306(f));
• liability of anyone in the business of manufacturing, selling, repairing or servicing vehicles for a defect they caused or failed to correct;
• liability of a driver who intentionally causes injury or damage, engages in criminal conduct, engages in conduct warranting punitive damages, or causes death or injury while operating under the influence (OVUII under § 291E-61).

After a Tort Recovery: 50% Reimbursement (§ 431:10C-307)

When an injured person obtains a tort recovery, by suit or settlement, that duplicates PIP benefits already paid, the motor vehicle insurer is reimbursed 50% of the PIP benefits paid, up to the maximum limit. A person sued for that reimbursement may be awarded attorney's fees (§ 431:10C-211(b)).

Time Limits (§ 431:10C-315)

Suits on motor vehicle insurance benefits generally must be brought within the later of two years after the accident, two years after the last benefit payment, two years after a final arbitration order, and certain other dates. Tort suits arising from motor vehicle accidents must be brought within the later of two years after the accident or two years after the last payment of motor vehicle, workers' compensation or public assistance benefits.