10 Commandments for Insurers Responding to Florida PIP Demand Letters

Under Florida law, a party seeking reimbursement of Personal Injury Protection (PIP) benefits must formally demand payment by the insurer before filing a lawsuit. Specifically, Florida Statute 627.736(10), in conjunction with other parts of the No Fault Law, outlines the procedures applicable to the submission and response to a demand letter. With that said, there are a myriad of factors to consider before preparing this response. Here are 10 commandments to guide you:

1. Read the demand letter carefully, including the attachments. You must figure out specifically what the demand letter is seeking. Not all demands are equal and an insufficient review of the plaintiff attorney’s demand could result in the insurer waiving certain defenses in its response.

2. You don’t have to give them everything they ask for. Florida’s No Fault law (and other insurance statutes) outlines what an insurer is obligated to provide to a party seeking reimbursement pre-suit. Just because counsel requests something, if the statutes do not require production, you are under no obligation to voluntarily provide information or documents.

3. The date of receipt starts the time clock. Upon receipt of the demand letter, the insurer has 30 days to respond to the demand for reimbursement and either pay additional monies or deny payment. As such, it is important to have defined procedures for receipt and processing of all PIP demand letters. You must calendar the receipt date and diary the response date.

4. The year counts! Depending on when the accident and subsequent treatment occur, there may be statute of limitations and policy defenses to employ. For example, the 2012 amended PIP statute mandates that an “insured” receive treatment within a certain period of time. If you are unsure, consult with counsel.

5. The policy controls… sometimes. In July 2013, the Florida Supreme Court in Geico General Insurance Company v. Virtual Imaging Services Inc., 141 So. 3d 147. (Fla. 2013) ruled on the sufficiency of Geico’s PIP portion of its insurance policy in conjunction with Florida statutes. Essentially, the Court held that insurance companies must reference the permissive method of calculation based on the Medicare fee schedules and can only limit reimbursement based on those fee schedules. In response, insurance companies amended their PIP-related policies to comply with the court’s ruling. It is very important an insurer verify and confirm the policy version applicable to the claim.

6. The claim notes are your friends. Read them. Prior to the receipt of the demand letter, various departments may have assisted in review of the claim. These claim notes provide an organized road map of the life of the claim and could assist in determining the final response to a demand letter. If necessary speak with the claims professional(s) who posted notes for clarification.

7. Process the bills. Depending on the policy period and timing of treatment, the medical bills may or may not have been processed in accord with recent Florida court decisions (see #5) and/or applicable Florida statutes. Crunch the numbers again!

8. When possible, avoid paying interest, penalty and postage. Just because an attorney demands the kitchen sink, doesn’t mean he or she is entitled to it. Should an insurer pay additional benefits in response to a demand letter, there are specific statutes governing the appropriate interest rate and payment of penalty. You may be able to avoid penalty, interest or postage in some cases.

9. Watch what you say… it can come back to bite you. Words are powerful and your demand response holds weight if a suit is ever filed. More likely than not, it will be admissible. There is some case law on waivers either implicit or express when dealing with an insurer’s demand response. Consult with a legal professional experienced in handling insurance matters in order to craft strategic responses to demand letters.

10. 30 days means 30 days. Every day counts. Florida statutes govern when an insurer has responded to the demand letter. A day late could result in a lawsuit. Don’t give the plaintiff an excuse.

Nneka B. Uzodinma and Harris B. Kirsch are associates in the Fort Lauderdale office of Marshall Dennehey Warner Coleman & Goggin. As members of the firm’s Special Investigations Unit (SIU) Practice Group, they focus on general PIP litigation and other insurance matters. They can be reached at (954) 847-4920 or hbkirsch@mdwcg.com; NBUzodinma@mdwcg.com.