PIP, the Tort Threshold, and the Delivery App

Which policy is primary. In a no-fault state, PIP follows the vehicle occupied, not the injured person's own coverage. Marcus was occupying Kayla's covered auto, so Kayla's PIP is primary. Marcus's parents' policy is not the source of his PIP here, and his health insurance does not go first for auto-related injury in the ordinary Kentucky arrangement - PIP is primary up to its limit.

How the $10,000 works.

• The limit is an aggregate per person. Medical expenses are payable up to the limit, and lost earnings are payable at a weekly cap (commonly $200 per week) within that same aggregate.
• Marcus's medical bills alone are $22,000, which exceeds the $10,000 aggregate.

Result: the $10,000 is exhausted by medical expenses. Because the aggregate is consumed, the lost-wage benefit - which would otherwise be capped at roughly $200 × 6 weeks = $1,200, not the $3,600 he actually lost - yields nothing further unless the policy provides added PIP. Marcus's uncompensated medical ($12,000), his excess wage loss, and any general damages must be pursued through tort or UM.

Watch the ordering question. If the policy pays medical or wage loss rather than medical first, Marcus may elect some wage benefits - but at $200 per week against a $10,000 aggregate, the sensible strategy is to preserve the limit for medical. Advise accordingly rather than assuming automatic application.

Tort threshold - satisfied. Kentucky's no-fault law restricts tort claims for non-economic damages unless the injury meets a statutory threshold, most commonly medical expenses exceeding $1,000 (with additional exceptions for death, permanent injury, and similar serious categories). At $22,000 in medical bills, Marcus is far past the threshold and may sue for pain and suffering, excess wage loss, and excess medical.

But the suit is against the wrong person. The son had the right of way; the uninsured driver ran the red light and was cited. Negligence determines liability, and the son has none apparent on these facts. Suing him is not the path.

The real claim is UM.

• The other driver is uninsured, which is exactly the risk UM covers.
• UM follows the covered vehicle: Marcus, as an occupant of Kayla's covered auto with permission to be there, is an insured for UM purposes. He does not need to be a named insured or a resident relative.
• Limits equal Kayla's liability limits (50/100/50), so up to $50,000 per person is available for Marcus's damages, reduced by amounts recovered from other sources (the $10,000 PIP and any liability payment).

The UIM rejection is irrelevant here. That written rejection waives underinsured coverage, which would matter if the at-fault driver had some insurance below the claim value. This driver has none, so the claim is UM, not UIM.

Possible second layer: Marcus may also look to his parents' policy since he is a resident relative there. Whether that coverage is primary, excess, or available at all depends on its other-insurance and household-vehicle provisions - do not assume it stacks automatically.

Analyze it as three separate coverages, because they can produce three different answers.

1. Liability - likely excluded. Personal auto policies exclude use of a vehicle to carry persons or property for a fee, and modern endorsements expressly target delivery-for-hire arrangements. Restaurant/food delivery is the paradigm case. If excluded, Kayla's policy owes no defense or indemnity for the son's liability. The carrier must also consider whether it owes anything given the son appears not to be at fault - but the exclusion still matters for defense-cost exposure.

2. UM - likely excluded on the same reasoning. UM coverage applies to a "covered auto," and the definition of covered auto is usually qualified by the same use restrictions. If the vehicle was being used in a delivery-for-hire arrangement at the time of the loss, the auto may not be a covered auto, and Marcus's UM claim under Kayla's policy may fail with it. This is the harsh result most insureds never anticipate: the injured passenger loses his best source of recovery because of the driver's use of the car.

3. PIP - check the specific PIP exclusions, do not assume. PIP is a separate mandated coverage with its own exclusion list, and the standard list is narrower than the liability exclusions (racing, use without permission, intentional acts, workers' compensation situations). Many Kentucky PIP forms do not exclude delivery use. Practically, Marcus's medical bills may still be paid by PIP even if liability and UM are gone - which is precisely why the three coverages must be analyzed separately rather than with a single "business use" conclusion.

Practical consequences.

• The app company's commercial auto coverage may be the primary liability and UM source; Marcus should pursue it.
• The $10,000 PIP exhaustion problem from the earlier analysis stands, and it may become his only recovery on this policy.
• Kayla needs to be told plainly that her policy may respond to almost nothing here, and that a delivery endorsement or a commercial policy was the fix - a conversation best documented in writing.