Dan has a PAP with 10/20/10 and basic PIP with a $1,000 deductible. He is struck by a car; medicals are $7,500 and lost wages $1,000; He dies. How much will PIP pay?

Dan has a PAP with 10/20/10 and basic PIP with a $1,000 deductible. He is struck by a car; medicals are $7,500 and lost wages $1,000; He dies. How much will PIP pay?

• A. $9,600
• B. $10,800
• C. $12,000
• D. $8,000

Answer: (B)

In Florida PIP, after the deductible, benefits are paid at 80% of medical expenses and 60% of lost wages. If the insured dies from the accident, a death (funeral) benefit is also provided to survivors. Here, the deductible is $1,000. Medical expenses are $7,500, so the amount eligible for PIP medical payments is 7,500 − 1,000 = 6,500; 80% of that is 5,200. Lost wages are $1,000; 60% of that is 600. So the PIP payout for medical and wages is 5,200 + 600 = 5,800. Since he dies, a death benefit of $5,000 applies, bringing the total to 5,800 + 5,000 = 10,800.

In Florida PIP, after the deductible, benefits are paid at 80% of medical expenses and 60% of lost wages. If the insured dies from the accident, a death (funeral) benefit is also provided to survivors.

Here, the deductible is $1,000. Medical expenses are $7,500, so the amount eligible for PIP medical payments is 7,500 − 1,000 = 6,500; 80% of that is 5,200. Lost wages are $1,000; 60% of that is 600. So the PIP payout for medical and wages is 5,200 + 600 = 5,800. Since he dies, a death benefit of $5,000 applies, bringing the total to 5,800 + 5,000 = 10,800.