What Does Personal Injury Protection (PIP) Insurance Cover?

Personal injury protection (PIP) insurance is a type of car insurance that covers medical expenses and other costs if you or your passengers are injured in an accident. PIP is required in some states but optional in others. So what exactly does PIP cover and what are the benefits?

What is Personal Injury Protection Insurance?

Personal injury protection, or PIP, is a type of car insurance coverage that pays for medical expenses resulting from a motor vehicle accident, regardless of who is at fault. It is sometimes called “no-fault” coverage because claims are paid under your own policy rather than having to establish fault or wait for reimbursement from another party.

PIP is designed to help pay for injuries suffered by you, members of your household, passengers in your vehicle, and in some cases pedestrians struck by your vehicle. It ensures prompt payment of certain expenses without the need to first file a liability claim against the at-fault driver.

Also Read: What is Liability Car Insurance Coverage (Cost 2024)

PIP Coverage and Benefits

Personal injury protection policies vary somewhat by state, but there are common coverages and benefits. Here is an overview of what PIP insurance typically includes:

• Medical expenses – This is the primary benefit of PIP coverage. It includes payments for hospital bills, doctor visits, surgeries, X-rays, prescription medication, and any other medical care necessary due to accident-related injuries.
• Lost wages – If injuries from an accident prevent you from working, PIP coverage pays a portion of lost income, up to policy limits. This can help replace wages lost while recovering.
• Rehabilitation – PIP may cover physical therapy and other rehabilitative treatments that aid recovery from accident injuries.
• Replacement services – If you can’t perform basic services for yourself or family due to injuries, PIP may pay for replacement services such as housekeeping and transportation.
• Funeral expenses – If an insured dies from accident injuries, PIP may provide funeral, burial or cremation benefits to surviving family members.
• Survivor benefits – Some PIP policies pay benefits to surviving family if an insured dies from accident injuries. This can help replace lost income.

What is Not Covered by PIP?

While personal injury protection covers accident injury-related expenses, there are important exclusions. PIP does not cover:

• Damage to vehicles or property – Collision and comprehensive coverage pay for vehicle damage.
• Injuries while driving for work – Occupational accident policies would cover these.
• Injuries while committing a crime – Illegal activity is excluded.
• Bodily injury liability – PIP covers you and passengers, liability covers others injured by you.
• Expenses beyond policy limits – Policies have per person and per accident caps.

Is PIP Insurance Required?

Personal injury protection insurance is mandatory in some states and optional in others. Here are the requirements:

• Required PIP states – 15 states and Puerto Rico require PIP coverage. Most are no-fault insurance states requiring PIP to avoid lawsuits after accidents.
• Optional PIP states – In a handful of states like Arkansas and Texas, PIP is available as an optional add-on.
• States with no PIP – The rest of the states do not have PIP insurance options. Liability and health insurance cover injuries.

Useful Information: Comprehensive Car Insurance: What does it Cover?

PIP in No-Fault vs. Fault States

Whether PIP is required or not often depends on if the state has no-fault auto insurance laws or is a traditional fault-based state.

No-Fault States

In no-fault states, PIP is required. Each driver’s PIP coverage pays for their injuries, regardless of fault. These laws limit lawsuits, requiring injured parties to claim on their own PIP policy first.

No-fault states include Florida, Michigan, New York, and several others. The minimum PIP coverage and benefits are mandated by the state. Drivers must follow the requirements.

Fault States

In fault or tort states, drivers can sue other at-fault drivers for accident damages. PIP is generally not required and health insurance covers medical costs. However, PIP can still be purchased for additional protection.

PIP benefits everyone in the vehicle regardless of fault. That’s an advantage even in fault states. PIP also has higher limits for medical expenses compared to standard health insurance.

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What are the Limits of PIP Insurance?

Personal injury protection has defined limits on coverage amounts, including per person, per accident, and aggregate limits over time.

• Per person limits – This caps the payout per insured person per accident. Limits often range from $5,000-$10,000.
• Per accident limits – This is the maximum payout for all claims per accident involving the policyholder’s vehicle. May be up to $50,000.
• Aggregate limits – The maximum payout obligations per policy, such as within a 12 month policy period. Varies by state and insurer.

Higher PIP limits mean greater protection. But this also raises the insurance premiums. Consider your needs and budget when selecting limits. The minimum required in your state may suffice for some drivers.

Should I Get PIP Insurance?

So should you get personal injury protection if you have a choice? Here are some factors to consider:

• Health insurance – Those with excellent health insurance may not need PIP. But health plans may have deductibles and coinsurance payments. PIP can help cover these costs.
• Passenger protection – PIP covers passengers regardless of fault. Without it, they’d need to rely on their health insurance or sue you.
• Lawsuit protection – In fault states, PIP pays your expenses right away rather than waiting for a liability settlement.
• Wage loss coverage – Health insurance does not cover lost wages. PIP provides partial wage replacement.
• Affordability – Even just minimum PIP limits provide strong benefits for a relatively low premium.

For most drivers, the benefits of personal injury protection insurance outweigh the small additional cost. Unless you have unlimited health coverage, PIP can fill gaps left by health insurance.

The Bottom Line

Personal injury protection insurance provides valuable medical, wage loss and accident benefits after an auto accident. While fault and health insurance provide some protection, PIP fills gaps that these may leave behind. For prompt payment of injury expenses without determining fault, PIP is an affordable and recommended add-on.

Frequently Asked Questions

Below are answers to some common questions on personal injury protection car insurance.

Does PIP cover property damage?

No, PIP only covers medical and related expenses for injured people. Property damage coverage pays to repair or replace vehicles and property.

What if PIP runs out?

If your expenses exceed the PIP limits, health insurance may cover remaining costs. In some no-fault states, you may be able to sue the at-fault driver for amounts over the limit.

Does PIP have a deductible?

Most PIP coverage does not have a deductible. You receive benefits regardless of fault in an accident.

Can I use PIP and health insurance?

Yes, PIP and health insurance work together. PIP generally pays first, then remaining costs are submitted to health insurance.

If I have Medicare, do I need PIP?

Medicare beneficiaries can still benefit from PIP. PIP may pay for copays, deductibles, lost wages and other costs Medicare does not cover.

Can someone else’s PIP cover me?

As a passenger, you can file a claim under the driver’s PIP policy if they purchased it. Pedestrians can use the PIP from the policy of the vehicle that hit them.