If Bill has $10,000 in PIP coverage with a $500 deductible and incurs $14,000 in medical bills, how much will his PIP pay?

In the scenario presented, Bill has Personal Injury Protection (PIP) coverage of $10,000 with a $500 deductible, and he incurs $14,000 in medical expenses. To calculate how much PIP will pay, it's essential to first consider the deductible.

The deductible is the amount that Bill must pay out-of-pocket before his PIP coverage kicks in. Since Bill’s PIP has a $500 deductible, we need to subtract this amount from the total medical bills he incurred.

Starting with his total medical bills of $14,000, we subtract the $500 deductible:

$14,000 (total medical bills) - $500 (deductible) = $13,500

However, because Bill's PIP coverage is capped at $10,000, we need to assess how much of the remaining amount will actually be covered. The remaining eligible medical expenses after applying the deductible are $13,500. Yet his coverage limits the maximum payout to $10,000.

Therefore, the PIP will only pay up to its maximum limit of $10,000, but first applying the deductible results in coverage of the remaining eligible expenses after the deductible is met. This means the calculation for how much PIP pays reflects the