Question About PIP

[Annetpa]

Hi, Im studying to get my 220 lic.
Can someone explain me this question? I know is very basic question, I just started a course 2 weeks ago.
The insured has a PIP policy with a $1,000 deductible. If the insured incurs $10,000 in medical bills, how much would be payable by the insurance company?
A. $10,000
B. $7,200
C. $6,000
D. $8,000
The correct answer is: B. $7,200
Why is 7,200? The PIP is 10 000 minus the deductible will be 9000, thats what the insurer suppose to pay, no?
Thanks a lot!

 

[F150]

no deduct in PIP............

 

[FL P&C Broker]

$10,000 - $1,000 = $9,000 * 80% = $7,200

 

[flagent407]

Hi, Im studying to get my 220 lic. Can someone explain me this question? I know is very basic question, I just started a course 2 weeks ago. The insured has a PIP policy with a $1,000 deductible. If the insured incurs $10,000 in medical bills, how much would be payable by the insurance company? A. $10,000 B. $7,200 C. $6,000 D. $8,000 The correct answer is: B. $7,200 Why is 7,200? The PIP is 10 000 minus the deductible will be 9000, thats what the insurer suppose to pay, no? Thanks a lot!

Yes, PIP can have a deductible and it pays $7,200 because it only covers 80% of medical expenses with no more that a $10k payout.

 

[ToddC]

Still a loaded question as the OP's test applies to a certain state and PIP is different in many states.

But agreed, $1000 ded is taken and then 80% paid.

 

[kingzcourt]

Can anyone tell me about PIP coverage in Texas.

 

[Annetpa]

Thanks so much everyone!!! You have been very helpful.