Choosing The Right Pip Auto Insurance Coverage

Personal Injury Protection (PIP) is a type of insurance coverage that pays for medical, rehabilitative, and living expenses following a car accident, regardless of who was at fault. PIP is sometimes called no-fault coverage because it pays for the policyholder's own medical costs, regardless of who caused the accident. PIP coverage can be especially important if you don't have health insurance or if your health insurance plan has a high deductible. When deciding how much PIP coverage to choose, consider your health insurance coverage and deductible amount. If you have comprehensive health insurance with a low deductible, you may need less PIP coverage. However, if you have high health insurance deductibles or no health insurance at all, you may want to consider higher PIP coverage to protect yourself from unexpected medical expenses.

Primary vs. secondary health insurance

Personal Injury Protection (PIP) is an optional coverage that pays for your medical, rehabilitative, and living expenses following an auto accident, regardless of who was at fault. PIP is sometimes called "no-fault" coverage.

You can use your health insurance as your primary medical coverage and PIP as secondary coverage. This can reduce your premium, but you need to ensure that your health insurance covers injuries from automobile accidents.

When you have two forms of health insurance coverage, one is considered primary, and the other is secondary. The primary insurance is responsible for paying first on any claims. The secondary insurance comes into play only if the primary insurance policy is unable to cover the entire claim.

The primary insurance is typically the main source of coverage for an individual or family. It is the first policy billed for medical expenses and is responsible for paying a majority of the costs. It is usually obtained through an individual's employer or purchased directly.

The secondary insurance is an additional policy that provides supplemental coverage. It is not the main source of coverage and only comes into play after the primary insurance has paid its portion. It is often obtained through a spouse's employer or purchased separately.

When you have primary and secondary insurance, each plan pays a portion of your medical bills. Your primary insurer is the one who pays first – up to the coverage limits. The secondary insurer then pays any remaining costs.

There are advantages and disadvantages to carrying two health insurance plans. On the one hand, you may have more coverage options, which can reduce your costs. On the other hand, you may have to pay premiums for two plans, and the benefits of having two plans are usually modest, so the cost of premiums may outweigh the advantages. Additionally, having two insurance plans can make the claims process more complicated.

Minimum coverage amounts

Personal Injury Protection (PIP) insurance, also known as "no-fault" insurance, pays for a driver's medical, rehabilitative, and living expenses following a car accident, regardless of who was at fault. PIP covers medical costs, work-loss costs, and funeral costs. In New Jersey, the default coverage starts at $100 per week for a $15,000-per-year policy, and it can go up to $5,200 per week. The total annual payout cannot surpass the injured driver's normal income. Policyholders are also entitled to a $12 daily payout for essential services they cannot perform because of an injury, such as laundry, snow removal, and house cleaning.

The minimum amount of PIP coverage required in New Jersey is $15,000, but you can purchase up to $250,000. If you have lower limits and suffer a severe brain or spinal injury, your limits may automatically jump up to $250,000 until you are stabilized. There is also a standard deductible of $750 for PIP in New Jersey, but you may increase or decrease it to adjust your premium.

In South Carolina, the minimum liability auto insurance coverage requirements are $25,000 per person for bodily injury and $50,000 for all persons injured in one accident. Additionally, the minimum limit for property damage liability insurance is $25,000 for all property damage in one accident.

While most states are considered at-fault states, there are 11 no-fault states: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, and Pennsylvania. In these states, drivers are required to file bodily injury claims with their own insurance through their PIP coverage. However, some no-fault states allow drivers to opt out of their PIP coverage requirement.

Medical expenses

In the case of an accident, your health insurance provider would pay first, and your auto insurer would provide secondary coverage through PIP. PIP covers medical expenses up to a certain limit, which varies by state and insurance company. The minimum coverage amount is set by state governments, while the maximum is usually set by insurance companies and typically does not exceed $25,000. However, in New Jersey, most drivers purchase up to $250,000 worth of PIP coverage.

PIP also provides a $12 daily payout for essential services that the policyholder cannot perform due to their injuries, such as laundry, snow removal, and house cleaning. Additionally, if a policyholder dies in a car accident, their next of kin may be entitled to a maximum payout for lost income and essential services, as well as funeral expenses.

It is important to note that PIP does not cover medical expenses if you were injured while driving for work purposes, committing a crime, or if your injuries exceed the coverage limit you have purchased.

Lost wages

In New Jersey, the default coverage for lost wages starts at $100 per week for a $15,000-per-year policy, with a maximum weekly payout of $5,200. The total annual payout cannot exceed the injured driver's normal income. Policyholders are also entitled to a $12 daily payout for essential services they cannot perform due to their injury.

If you are a resident of New Jersey, it is important to note that PIP insurance is mandatory and the minimum amount of coverage required is $15,000. However, this amount may not be sufficient to cover the financial impact of a serious accident, including lost wages. Therefore, it is recommended to consider purchasing higher coverage limits, such as the $250,000 PIP coverage option, to ensure adequate protection in the event of a severe accident.

When deciding on the amount of PIP coverage, it is essential to evaluate your health insurance plan. If your health insurance plan covers lost wages, you may opt for a lower PIP coverage amount. However, it is worth noting that health insurance plans typically have higher deductibles and may not provide the same level of coverage for lost wages as PIP insurance.

In conclusion, when choosing a PIP auto insurance policy, carefully consider the potential financial impact of lost wages in the event of a car accident. Evaluate your health insurance coverage and choose a PIP policy that provides sufficient protection for lost income and essential services. Remember that the minimum coverage requirements may not be adequate, and consider opting for higher coverage limits to ensure your financial well-being in the event of an accident.

Funeral costs

If you're involved in a fatal car accident, PIP coverage may pay for funeral costs and other expenses up to your policy's limits. This is particularly useful if you don't have life insurance.

In New Jersey, for example, if a policyholder dies in a car accident, their next of kin may be entitled to the maximum payout for lost income and essential services, as well as funeral expenses. The relative will need to provide proof of death, but not proof of income, and is entitled to a maximum of $1,000 for funeral expenses.

While funeral costs are covered by PIP, it's important to note that the minimum coverage amount of $15,000 is considered far too low to cover the injuries incurred in most accidents and could be financially devastating. In New Jersey, most drivers buy $250,000 worth of PIP coverage, which is a higher amount than drivers typically purchase in other states.

When deciding on the amount of PIP coverage, it's essential to consider your health insurance plan. If you have health insurance, you may not need as much PIP coverage. However, it's worth noting that health insurance plans typically don't provide coverage for lost wages or help pay for services you can no longer perform, such as house cleaning or childcare, which PIP may cover.

Frequently asked questions