A Reminder about PIP “Subrogation” in New York and New Jersey

We are often asked in trucking cases whether we can settle a personal injury claim and also have the claimant release the “PIP Subrogation” claim, or the “PIP Lien.” In these states, the answer is “No.”

It really isn’t subrogation, or even a “lien.” And it makes a difference. In both states, the right of the PIP carrier to be reimbursed for its payments of medical expenses and lost earnings arises from statute. The right of reimbursement takes life when the first payment is made. Only the PIP carrier has the right of reimbursement, and only the PIP carrier can release the claim. That right of reimbursement is enforced, generally, through arbitration mandated by statute. In this regard, the PIP reimbursement claim is substantively and procedurally different from a worker’s compensation lien, or a physical damage subrogation claim.

In trucking and other commercial automobile claims, the PIP carrier’s right of reimbursement, or “Loss Transfer” in New York, generally stands alongside the injured party’s personal injury claim. When the personal injury claim is being negotiated, there is an impulse to want to include the PIP claim in the discussions with claimant’s counsel. But the claimant cannot release or waive the PIP claim. The claimant does not own that claim, and has no power over his insurance company to require or persuade it to settle or waive the claim.

So when the claim representative settles the personal injury claim, it must be remembered that the PIP carrier’s claim for reimbursement lives on. It must be dealt with separately, either by negotiation or through an arbitration or, infrequently, litigation. As defense counsel, we routinely defend both the personal injury claim and the PIP reimbursement claim, which avoids taking inconsistent positions with the PIP carrier and the personal injury claimant.