OLT-Breakroom: Help! PIP/Tort calculations

Could someone please expain to me why the answer is 2700.00 and not 2800.00?

PIP/Tort scenario from the unit: Insured has a 500.00 deductible and suffers 7500.00 in medical expenses and 2000.00 in lost wages. What can he recover in a tort suit?

I get 1500.00 in medical recovery 800.00 in lost wages plus the 500.00 deductible = 2800.00

Where did the other 100.00 go? I'm obviously missing something!

Thanks, Nancy

Re: Help! PIP/Tort calculations

by Jan Bradburn- - Thursday, 30 May 2013, 10:40 AM

HI Nancy, Always subtract the deductible from the medical expenses first then apply the percentages. $7500 - $500 = $7000 X 80% = $5600 for medical expenses and $2000 X 60% = $1200 in wage loss. $5600 + $1200 = $6800 The insured is out-of-pocket $9500 and they recover $6800 from PIP - so $9500 - $6800 - they can recover $2700 in a tort claim. Please let me know if you havee further questions. - Jan