Understanding Auto Insurance: What Is Pip And Why It Matters

Personal injury protection (PIP) insurance covers medical expenses and lost wages in the event of a car accident, regardless of who is at fault. It is mandatory in some states and optional or not offered in others. PIP is also known as no-fault insurance and is designed to pay out promptly to restore individuals hurt in auto accidents to health and productivity as swiftly as possible. It covers medical expenses, rehabilitation, lost wages, funeral expenses, and other reasonable and necessary expenses.

What does PIP cover?

Personal Injury Protection (PIP) covers medical expenses, lost wages, and other related costs if you or your passengers are injured in a car accident, regardless of who is at fault. PIP is also known as "no-fault insurance" and is required in some states as part of "no-fault auto insurance" laws that restrict your ability to sue for car crash injuries.

• Medical expenses from a car accident, including surgical, X-ray, and dental services.
• Lost wages due to injuries.
• Rehabilitation costs.
• Replacement services for tasks you can't do for yourself or your family, such as house cleaning and childcare.
• Funeral expenses and survivor benefits.

It's important to note that PIP doesn't cover everything. It won't cover bodily injuries to the other driver and their passengers, injuries sustained while committing a crime, or damage to someone else's property or your vehicle.

When is PIP required?

Personal injury protection (PIP) is required in 15 states as part of "no-fault auto insurance" laws. In these states, drivers are mandated to carry a minimum amount of PIP coverage. This is intended to keep the cost of auto insurance down for all drivers by keeping minor injuries from going to court.

Twelve of these states are considered "no-fault" states, where lawsuits over injuries are restricted to severe cases. These states include:

• Delaware
• Florida
• Hawaii
• Kansas
• Kentucky
• Maryland
• Massachusetts
• Michigan
• Minnesota
• New Jersey
• New York
• North Dakota
• Oregon
• Pennsylvania
• Utah

Three other states require PIP but lack "no-fault insurance" laws:

• Kentucky
• New Jersey
• Pennsylvania

In addition, PIP is optional coverage in some states and the District of Columbia, and unavailable in others.

When is PIP optional?

Personal injury protection (PIP) is mandatory in some states, but in others, it is optional or not offered at all. In states where PIP is optional, it's generally a good coverage to have.

PIP is optional in the following states:

• Arkansas
• Connecticut
• District of Columbia
• Pennsylvania
• Texas
• Washington

In Arkansas, Connecticut, Pennsylvania, and Texas, you must explicitly reject PIP in writing if you don't want it. In Arkansas, you can buy any or all of the three coverages that make up PIP: medical expenses, lost wages, and death benefits. Connecticut offers a choice between basic reparations coverage (like PIP) and medical payments coverage, or neither. Pennsylvania offers a choice between full and limited tort, with full tort offering unlimited rights to sue another driver.

In Washington, your insurance company is required by law to offer you PIP, and they will add it to your policy and charge you for it unless you reject it in writing. If you have a good health insurance plan, you may choose to decline PIP, although it covers some things that health insurance doesn't, such as reimbursement for lost wages and payments for services you can't perform, like house cleaning.

In the District of Columbia, PIP is also optional, but there is no mention of whether it is automatically added to your policy or if you need to explicitly reject it.

How does PIP work with health insurance?

Personal injury protection (PIP) is a type of insurance that covers medical and rehabilitative costs for you and your passengers in the event of a car accident. PIP is also known as "no-fault" insurance because it pays out regardless of who is at fault for the accident. This type of insurance is required in some states and optional in others.

If you live in a state where PIP coverage is required, you must file a claim under that policy before turning to your health insurance. However, even if PIP is not required in your state, it may still be beneficial to have as it can cover things like lost wages and funeral costs, which are typically not covered by health insurance.

In some states, such as New Jersey and Michigan, your PIP coverage can work in conjunction with your health insurance. For example, if you are injured in a car accident in Michigan, your health insurance may cover your physical injuries, while your PIP coverage would cover additional economic losses such as lost wages during hospitalisation.

The amount of PIP coverage you need depends on your specific situation. If you have a comprehensive health plan, you may only need the minimum amount of PIP coverage required by your state. However, if you do not have health insurance, it is recommended that you purchase a higher amount of PIP coverage to save you money and stress in the event of a car accident.

In summary, PIP and health insurance can work together to provide comprehensive coverage in the event of a car accident, but it is important to understand the requirements and limitations of both types of insurance in your state.

How much does PIP cost?

The cost of PIP insurance varies depending on factors such as the state, the insurance company, the coverage limit, and the deductible. In general, PIP insurance is relatively inexpensive, with monthly costs ranging from $5 to $50 for the coverage limits offered.

The total cost of PIP insurance will depend on the coverage limit, deductible, and state. For example, in Florida, PIP insurance costs around $10,000 with a $0 deductible, while in Washington State, the minimum coverage limit is $10,000 for medical expenses and $2,000 for funeral expenses.

Some states, like Michigan, have extremely high PIP claims, with an average of over $80,000. This is because Michigan requires unlimited PIP coverage, which can be very expensive. Other states, like Florida, only require PIP to cover a percentage of medical bills and lost wages, up to a certain limit.

It's important to note that PIP insurance is not available in all states, and the cost may vary depending on whether the state follows a no-fault or at-fault insurance system. In no-fault states, PIP insurance is usually more expensive because it provides more coverage. However, this is not always the case, and even in at-fault states, PIP insurance can be a worthwhile investment to help cover medical bills after an accident.

Frequently asked questions