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