Hours may differ due to COVID-19
What is PIP Insurance?
What is PIP Insurance?
Mar 05

What is PIP Insurance?

What Does PIP Mean?

PIP stands for personal injury protection and provides for medical expenses that may be incurred as a result of an auto accident. In some cases, personal injury protection may also provide coverage for lost wages while recovering from an auto accident injury.

PIP insurance is also referred to as no fault insurance due to the fact that it will be paid regardless of who was deemed at fault for the vehicle accident. Even is the accident was determined to be your fault you can still receive the maximum benefits that the insurance allows.

Are You Required to Have PIP Insurance?

Personal injury protection insurance is a mandatory coverage in thirteen states including:

  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Michigan
  • Utah
  • Pennsylvania
  • Massachusettes
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • District of Columbia

In most other states PIP insurance is considered optional though it is highly recommended, especially with the rising costs of healthcare.

Why Do Some States Require PIP?

Many states choose to require personal injury protection as part of their vehicle insurance policies in the hopes of reducing the number of lawsuits filed for auto accidents. There has been some relief in the courts of vehicle accident lawsuits in these states, but many consumers are unhappy with the requirement and feel that their right to file a lawsuit should not be limited.

On the flip side, it allows most people who suffer auto accident injuries to get the proper treatment. Due to the backlash from consumers, 12 of the states that require PIP have written laws that allow drivers to pursue lawsuits when certain circumstances are met such as injuries resulting from driving under the influence.

What Does PIP Insurance Cover?

What is covered by personal injury protection insurance will vary from state-to-state. Typically the coverages will extend to what each state considered to be reasonable charges. For example, in some states, like Utah, alternative therapies such as acupuncture may be covered, while in other states they are not considered customary or reasonable treatment options. In all states, PIP is designed to cover injuries that are a direct result of the car accident that occurred.

In most states, personal injury protection will cover:

Medical costs - This includes all related doctor and emergency room visits, including a back pain doctor, ambulance rides and services, surgical treatments, medication, medical supplies or equipment, physical and occupational therapy, speech service, necessary prosthetic devices, durable medical equipment, treatment by a dentist or an optometrist, and in some cases, alternative therapies.

Lost Wages - In some states, if your injury prevents you from being unable to attend work, or perform your normal work duties, personal injury protection can help you cover some of the wages you may lose during your recovery. It is important to note that PIP is different from disability and will have a cap on either the length of time it will cover or the amount.

Compensation for Other Duties - There are some policies that will help you when you are prevented physically from performing other household duties. This includes such services as cleaning services, child care services, or even yard work.

Funeral Costs - In the event that the vehicle accident results in death, some PIP insurance may cover the costs of the funeral expenses up to a certain amount.

Transportation Costs - Your PIP insurance can also cover the costs of transportation to get you to and from medical appointments or treatments that are required for your auto accident injuries.

Why Do Insurance Companies Recommend PIP Insurance?

Insurances favor PIP insurance because it removes the difficulty of placing blame when it comes to paying out injuries. Each driver's policy will pay for the injury damages to their driver based on their needs alone and ensure that they get medical treatment.

It also allows them to set reasonable and customary treatment options and limits and reduces their exposure to lawsuits for catostrophic medical expenses due to injuries incurred by the other party.

Is PIP Insurance Costly?

Due to the no fault nature or personal injury protection insurance, and the fact that medical costs can be extremely costly, PIP insurance can be an expensive add-on. In states that require PIP insurance, it is often the most expensive part of a consumer's insurance policy. Even though the cost can seem high to consumers, it is significantly less than they will probably pay for medical treatment for one major accident or to cover the expense of a lawsuit for an at-fault accident where the other party suffered major injuries.

How to Set Your Limits for Personal Injury Protection

The amount you should have for coverage for PIP will largely depend on the coverage of your health insurance policy. With recent changes in healthcare, the first step is finding out whether or not your medical insurance will cover injuries from an auto accident as many do not. If your health insurance does cover injuries in the event of an accident, you can safely opt for the lowest legal level of PIP. Though, if your insurance will not cover accident injuries, or you want to take advantage of the other coverages such as lost wages or substitutes services, you might want to choose a higher policy limit.

When choosing a policy that covers lost wages, the minimum amount will largely be based on the wage of the highest earner in the household since wage payouts will vary based on the income you made when the accident occurred. Typically lower limits average around $20,000 of coverage for medical.

If You Have PIP, Do You Need to Have Bodily Injury Liability?

Even if you have PIP insurance, you will still need to have bodily injury liability coverage on your policy. PIP insurance will cover the injuries for those that are in your vehicle at the time of the accident, or someone injured by your vehicle, such as a pedestrian or bicyclist.

It will not cover the other driver or their occupants. Bodily injury liability is a form of liability insurance that is used to cover injuries to the other vehicle occupants if you are sued and found to be at fault for their injuries.

Having PIP coverage can give you the added protection you need to make sure that you are your passengers can get the proper medical treatment whether the accident is your fault or not. Talk to your insurance agent to determine the amount of PIP coverage that will best protect you and your family.