- Personal injury protection insurance covers medical expenses and lost wages if you're in a car collision.
- PIP insurance is usually considered primary coverage, meaning it kicks in before health insurance.
- While buying PIP insurance is generally recommended, it's mandatory in certain states.
Personal injury protection (PIP), like any other type of auto insurance coverage, is something you buy with the hope of never having to use it. But, if you do end up in a car accident, it could save you thousands of dollars in out-of-pocket costs. Though PIP isn't mandatory in every state, it's worth understanding how it works and whether you need it.
Introduction to Personal Injury Protection (PIP)
Personal injury protection (PIP), also known as no-fault insurance, covers medical expenses, lost wages, ambulance bills, and other related expenses if you and your passengers are injured in a car accident — regardless of who was at fault. While PIP is mandatory in some states, it's optional in others and not available everywhere.
How PIP Differs from Other Auto Insurance Coverages
PIP and bodily injury liability coverage might seem similar, but they're not the same. PIP coverage applies when you and other passengers in your car are injured in an accident, whereas bodily injury liability insurance covers medical costs for people in other vehicles if you're found at fault in a collision.
The Role of PIP in No-Fault Insurance States
In states with no-fault insurance laws, drivers must have PIP so that, if there's an accident, each driver's own insurance covers their medical bills and related costs — no matter who was at fault. This setup simplifies the claims process and reduces the need for long, costly legal battles over fault.
What Does PIP Insurance Cover?
Personal injury protection covers the following expenses if you and any other passengers in your vehicle are injured in a car accident.
Medical Expenses Covered by PIP
- Hospital bills
- Ambulance services
- Medical and surgical treatments
- Nursing care
- Dental treatment
- Optometric treatment
- Medication
- Medical supplies
- X-rays
- Prostheses
It's also worth mentionting that PIP insurance is often primary coverage, meaning that it will kick in before your health insurance. Additionally, in many states, you're required to buy PIP insurance regardless of if you have health insurance or not.
Lost Wages and Income Replacement
If you or the passengers in your vehicle can't work because of the injuries from the car accident, PIP insurance can help recover some of those lost wages.
Funeral Costs and Other Related Expenses
PIP also covers funeral expenses, including burials and cremations, as a result of a car collision.
Coverage for Passengers and Other Parties
PIP doesn't just cover you but also family members and other passengers in your car at the time of the accident, regardless of who was at fault.
How PIP Works in Different States
Requirements for PIP coverage vary from state to state.
PIP Requirements in No-Fault States
In no-fault states, PIP is mandatory, meaning all drivers must have a minimum level of PIP coverage as part of their auto insurance policy. The required amount can vary. In some states, it can be as low as $10,000, whereas in others, it's $50,000.
Optional vs. Mandatory PIP Coverage
PIP coverage can either be mandatory or optional, depending on the state's regulations. In no-fault states like Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Puerto Rico, and Utah, PIP is mandatory. And while Delaware, Maryland, and Oregon are not no-fault states, they still require you to carry PIP coverage. However, in other states, PIP coverage may be optional, which means you can decide if you want additional protection beyond traditional liability coverage.
State-Specific PIP Limits and Regulations
PIP coverage is required by law in Delaware, Florida, Hawaii, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania, Puerto Rico, and Utah.
The minimum amount of PIP coverage you need depends on the state in which you live. For example, the Texas state minimum for PIP coverage is $2,500, whereas it's $10,000 in Kentucky. Even if you live in a state that doesn't require PIP insurance, it's recommended that you still purchase as much coverage as you can comfortably afford to stay protected.
Each state has its own PIP limits and regulatory requirements. Check your state's Department of Motor Vehicle (DMV) website for more details.
The Benefits and Limitations of PIP Insurance
Whether PIP insurance is mandatory in your state or not, it's worth taking the time to understand the benefits and limitations of PIP insurance so you know what to expect.
Advantages of Having PIP Coverage
- Covers medical expenses regardless of fault.
- Covers additional expenses like lost wages and funeral costs.
- Having this coverage can offer peace of mind.
- Typically provides immediate benefits to cover medical expenses and other costs.
Potential Drawbacks and Coverage Gaps
- Adds to your monthly auto insurance costs.
- Doesn't cover damage to your car or damage to other people's property.
- Doesn't cover injuries caused to other drivers.
When PIP May Not Be Enough
PIP policies come with coverage limits, so if you or a passenger in your car suffers serious injuries and needs extensive medical care, you could quickly reach your policy cap and may have to shoulder the remaining costs if you don't have health insurance.
Also, if your injury keeps you out of work or causes long-term disabilities, PIP's wage replacement may not be enough to cover extended time off. In such cases, disability insurance may offer you more financial support in the long term.
Another limitation of PIP insurance is that it doesn't cover vehicle repairs or property damage, so you may want to buy additional coverage, like collision or comprehensive insurance, just in case.
How to File a PIP Claim
Filing a PIP claim is similar to filing any other car insurance claim. Here's what that process looks like after a car accident occurs and you've ensured your safety:
Steps to Take After an Accident
- Document the damage: Make sure to thoroughly document the damage at the scene of the car accident by taking pictures.
- Notify your car insurance company: Next, contact your insurer's customer service department to let them know what happened. They'll instruct you on how to start a PIP claim.
- Submit the required information: To process your claim, your auto insurance company will need to know the details of your accident. Having this information ready can help speed up the claims process.
Documentation Needed for a PIP Claim
Your insurer will guide you through the required documentation they need from you. Usually, the documentation needed for a PIP claim includes the following:
- Police reports
- Photos
- Eyewitness statements
- Medical bills
- Treatment records
- Proof of lost wages if you're unable to work
Common Issues and How to Avoid Them
- Misunderstanding coverage details: A common issue people face when filing a claim is not knowing what expenses are covered and getting their claims rejected. To avoid this mistake, understand your PIP plan's coverage limits and benefits beforehand. Also, remember that you can only make a personal injury claim if you, or anyone in your vehicle, were injured in some way. You can't submit a claim for anything else, like damage to your vehicle or other people's property.
- Lack of documentation: Claims can get held up or denied if you don't submit all the documents your insurer requested from you, so double-check that you've submitted everything, like medical reports and proof of lost wages.
- Missed deadlines: Another common reason for PIP claim denials is missed deadlines. Each state has different deadlines for making a PIP claim. For example, if you're in Florida, you must get medical treatment within 14 days of the crash to be eligible for PIP coverage.
Personal Injury Protection FAQ
What expenses are typically covered by PIP insurance?
PIP insurance typically covers hospital and medical bills, rehabilitation costs, childcare expenses, lost income, nursing care, and funeral expenses.
Can I choose my own medical providers with PIP coverage?
Yes. You can typically choose your own medical providers for PIP claims. However, some insurers may require you to work with their network of approved providers.
Does PIP cover passengers in my vehicle?
Yes. PIP also covers passengers in your vehicle, regardless of whether they have health insurance.
How does PIP interact with other types of insurance?
If you're injured in a car accident and have both PIP and health insurance, your PIP coverage will typically kick in first in most states to cover any medical costs, followed by your health insurance policy.
What happens if my PIP coverage runs out?
If your PIP coverage runs out, your health insurance policy will kick in to help you cover the rest of your medical bills. However, this also means you may incur out-of-pocket expenses such as co-pays and car insurance deductibles.
