PIP Coverage: Who Lives in Your Household?

One of the most important benefits an automobile insurance policy provides is personal injury protection (PIP) medical expense benefits. A named insured, a relative residing with the named insured, or anyone else who is otherwise not covered by automobile insurance, is usually entitled to have her medical bills paid for by the insurer, where those bills arise out of an automobile accident.

There are, however, certain circumstances in which an insurer can refuse to provide PIP benefits to a claimant. One of those circumstances is where the named insured has made a material misrepresentation when applying for insurance. Automobile insurance policies typically exclude coverage for any person making a misrepresentation of a material fact in the application for the policy (usually because the misrepresentation affects the insurer’s calculation of the appropriate premium to be charged for the policy). Examples of such material misrepresentations include omissions of names of household members and anticipated users of the vehicle to be insured. These misrepresentations are material because they affect the risk of a claim being made and, in turn, affect the calculation of the premium to be charged.