Personal injury protection, also referred to as PIP or “no-fault insurance” or "first party benefits coverage," is one of the required car insurance coverages in certain states. When an accident occurs, PIP covers medical and other expenses that are the result of injuries sustained.
While some states don’t have personal injury protection insurance, some states require their drivers purchase PIP and in some other states it’s an optional coverage for policyholders.
What is PIP?
Regardless of whose fault the car accident is, if you’re involved in an accident and you have personal injury protection, you’ll get coverage for your medical bills, up to your policy’s limits. Plus, it may also pay for loss of income if the injured party is unable to work or earn their complete salary or wages. And because it’s a comprehensive insurance coverage, it will also meet expenses like transportation for your follow-up appointments at your physician's clinic or hospital. It’s important to note that:
- PIP covers expenses that are related to the injury. In other words, it doesn't cover property damage.
- As with all insurance types, PIP provides coverage up to a limit and hinges on applicable laws in that state.
What does PIP cover?
Besides providing coverage for the medical and hospital bills, in case you or your passengers sustain injuries in a car accident, personal injury protection may also help pay for expenses that result from such injuries. The various types of expenses that PIP may cover include:
- Medical bills – They are defined as "necessary" or "reasonable" expenses and may include:
- Emergency, surgery, nursing, x-rays, prescription medication, dental care, prosthetic devices, rehabilitation, therapy and remedial care
- Psychological or psychiatric expenses
- Optometry services
- Audiological and speech services
- Essential services, such as:
- Custodial services, like childcare
- House cleaning
- Lawn mowing
- Laundry services
- Shoveling snow services
- Funeral expenses
- Death benefit
- Loss of income (not available in all states)
What is PIP coverage limit?
The personal injury protection coverage limit is the maximum amount your car insurance company has agreed to pay in the event of an accident. In states where PIP is legally required, you’ll have to purchase insurance that meets the minimum coverage limit required by your state.
In addition, your personal injury protection may be subject to a deductible. This means that you may have to pay a certain amount yourself, out of pocket, before your insurance company’s coverage kicks in. Be sure to note on your policy whether you have a PIP deductible.
Should I purchase more than the PIP limit?
You may consider purchasing higher PIP limits than your state requires. Having a higher limit than the minimum stipulated amount is often a wise decision. In case the medical expenses are more than your PIP coverage limits, then depending on whether your health insurance covers it or not, you might have to pay those expenses out of pocket.
When deciding on your PIP limit, you should find out if your health insurance covers car accidents. If your policy provides coverage after auto accidents, you may not need more than your state required personal injury protection.
If your health insurance doesn’t cover car accidents, it’s important to consider purchasing a higher personal injury protection limit. However, keep in mind that the higher PIP coverage you opt for, the higher the premiums you will have to pay. Both the amount of PIP coverage you purchase and your premium amounts will be mentioned in your declaration sheet.
Note: In the event several people get injured in an accident, PIP policies have a per-person maximum amount that limits the amount of insurance coverage each injured party is entitled to.
Who does PIP cover?
In addition to personal injury protection covering the health care expenses of the policyholder, it also covers the medical expenses of his or her passenger(s) who were injured in the accident, if the accident is covered by the PIP plan.
- The person insured by the policy
- Any immediate family member of the policyholder
- Any other person/s injured while occupying the policy holder’s car
Which states require PIP?
States have different minimum car insurance requirements. Though personal injury protection is available and optional in some states, as of May 2019, it’s a legal requirement in 12 states. In "no-fault" states, if the accident is covered by the policy, then each driver’s insurance will pay for their respective medical and other expenses related to their injuries, irrespective of whose fault it is. On the flip side, in "at-fault" states, the party responsible for the accident has to pay. The 12 states where PIP is mandatory are
- Florida ($10,000 minimum)
- Hawaii ($10,000 minimum)
- Kansas ($4,500 minimum)
- Kentucky ($10,000 minimum)
- Massachusetts ($8,000 minimum)
- Michigan (unlimited)
- Minnesota ($40,000 minimum)
- New Jersey ($15,000 minimum)
- New York ($50,000 minimum)
- North Dakota ($30,000 minimum)
- Pennsylvania ($5,000 minimum)
- Utah ($3,000 minimum)
In Arkansas, Delaware, Maryland, Oregon and Texas, drivers are required to carry PIP, but they are able to reject the coverage in writing.
The reason these states chose to make PIP insurance mandatory is that they want to reduce the number of lawsuits brought against drivers who are at fault. And though this tactic has worked to a certain degree, consumers who feel it is their legal right to file charges against the defender are allowed by law to sue in certain circumstances. Also, it’s important to note that the features of personal injury protection coverage differ between states.
Do you need PIP if you have health insurance?
Irrespective of whether those injured in the accident have health insurance, personal injury protection will cover the medical expenses. If the medical bills exceed the PIP limits, in some cases, health insurance covers further expenses as well. So, it’s essential to have both.
There are certain reasons why having a personal injury protection plan is beneficial, even if you’re covered by health insurance.
- Lost wages – Though a loss of income might not be covered by your health insurance plan, it is covered under your PIP coverage.
- Coverage for passengers – If your passenger(s) are injured, your health insurance will cover only your medical bills, but not theirs. On the other hand, a PIP plan will cover both.
- No deductible - While most health insurance policies have an out-of-pocket deductible, PIP often doesn’t have a deductible. This means you won’t be responsible for paying your insurance company before coverage kicks in for your medical expenses after an accident.
Do you live in a state that requires personal injury protection? See who drivers rate as the top car insurance companies in your state.
The content on this site is offered only as a public service to the web community and does not constitute solicitation or provision of legal advice. This site should not be used as a substitute for obtaining legal advice from an insurance company or an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. The comments and opinions expressed on this site are of the individual author and may not reflect the opinions of the insurance company or any individual attorney.