Personal Injury Protection (PIP) Coverage

What is personal injury protection coverage? 

Personal injury protection is a legal term that refers to insurance coverage for personal injuries. Personal injury protection (PIP) coverage, commonly known as no-fault insurance, covers your and your passengers' medical bills and lost earnings if you are injured in an accident. PIP insurance protects you regardless of who is to blame. Personal injury protection insurance is required in certain states, optional in other states, and not available in other states. 

What does personal injury protection insurance cover?

Personal injury insurance covers particular things if you're in a car accident, even if you're not driving. Depending on your state of residence, you may be protected for:

 

  • Medical costs for you and others insured under your insurance (also covers you if you are hit by a car while walking or riding your bike)

  • Wages lost if you or your passengers are injured and unable to work

  • Childcare, house cleaning, and yard work are examples of household services

  • Costs of disability and rehabilitation

  • Death benefit (amount awarded to your family if you are killed in a car accident)

 

Personal injury protection insurance pays for medical costs for you and anybody else covered by your policy. Non-medical benefits, like as coverage for lost earnings, home services, and disability, are available in some states and will protect you, your passengers, and family members in your household, even if they are not named on your policy.

 

What doesn't PIP insurance cover?

No-fault insurance will not reimburse you for expenses incurred as a result of an accident that are unrelated to personal injury, such as:

What is the definition of a no-fault insurance state?

A no-fault insurance state mandates drivers to carry PIP coverage, which covers some or all of their medical bills arising from a vehicle accident, regardless of who is at blame. No-fault jurisdictions further limit the right to sue, allowing only cases involving grave injuries to be brought. The goal of the no-fault system is to keep small injury cases out of the courtroom, therefore lowering the cost of vehicle insurance.

 

The Insurance Information Institute reports that there are presently 12 no-fault insurance states that mandate PIP coverage:

 

  • Florida

  • Hawaii

  • Kansas

  • Kentucky

  • Massachusetts

  • Michigan

  • Minnesota

  • New Jersey

  • New York

  • North Dakota

  • Pennsylvania

  • Utah

 

Although PIP coverage is optional in some at-fault jurisdictions, the majority of states are considered at-fault states and simply require liability insurance in place of PIP coverage. Learn more about your state's vehicle insurance regulations.

 

How to Choose the Appropriate Amount of Personal Injury Protection

 

  • Consider your health insurance: If you have health insurance, do you need PIP? If you have excellent health insurance, you may be able to choose a lesser level of PIP coverage. If you know you're already well-covered by your health insurance, it might be an excellent way to save money. This is especially true if your health insurance deductible is modest.

  • Consider your health insurance deductible: If you reside in a state where PIP is optional, if you don't have health insurance or are on a high-deductible plan, consider obtaining the bare minimum of coverage. There is no deductible in the majority of PIP states.

  • Understand which form of insurance pays first: When it comes to paying out a claim, PIP typically comes before your medical insurance. In most areas, if you are injured in a car accident, your PIP coverage will take precedence over whatever health insurance you may have.

  • If you don't have life insurance, consider adding PIP: Adding PIP to your policy might assist your family cover unexpected expenditures if you are killed in a car accident.

  • Consider your lost wages: If your job demands physical labor, can you afford to be out of work if you are injured in a vehicle accident? If not, consider adding PIP or raising your limitations because it compensates for lost income (up to a specific amount and length of time).

What if my state does not provide PIP?

In places where PIP is not available, you will be able to add medical costs coverage to your insurance. Medical payments usually do not cover missed income, but they do cover funeral and hospital expenses for you and passengers in your automobile, regardless of who is at blame. Coverage amounts vary by state, but are generally $10,000 or less, so medical payments should be utilized as a complement to your health or life insurance rather than as a substitute.

 

Medical payments can also be used to cover deductibles, copayments, and out-of-pocket expenditures incurred as a result of a car accident. You have the freedom to choose how to spend your medical expenses. You should think about using your health insurance to pay for medical bills and medical payments to cover your high deductibles and copays.