According to recent statistics by the National Safety Council, the average car accident where there are injuries can cost around $40,000.
In other words, a serious auto accident can put a large dent in your pocket.
Personal injury protection, also known as PIP insurance or PIP coverage, can help you manage some of these costs. Personal injury protection can even help to protect your friends and family after an accident.
In this article, we take a look at what exactly PIP coverage is and see whether this insurance is worth adding to the policy you have with your insurance company.
Firstly, What Is PIP Insurance?
Personal injury protection is a ‘no fault’ insurance coverage. No fault means that this insurance will provide coverage no matter which driver is at fault in an accident.
PIP insurance has been designed to cover some of the medical costs of the policyholder, as well as those of any passengers in the vehicle at the time of the car accident.
While PIP coverage may include some of the same coverage as your health insurance, PIP only covers car-accident-related injuries, which are sometimes excluded from health insurance policies.
What Does PIP Insurance Cover?
Personal injury protection will help to pay a portion of the medical bills and other expenses that arise following a covered accident.
This can include medical treatment for injuries that have been sustained by you or your passengers, and it also covers medical expenses if you are injured as a passenger in another car, or even as a pedestrian.
These medical expenses will typically include care such as:
- Medication.
- Surgery.
- Rehabilitation.
- Diagnostic tests.
- Ambulance transportation.
- Hospitalization.
- X-rays.
- Prostheses.
- Dental care.
- Psychiatric treatment.
- Chiropractic services.
In addition, personal injury protection insurance may cover other nonmedical expenses such as:
- Lost wages.
- Essential services replacement (such as childcare or other services you can’t perform due to your injuries).
- Funeral expenses.
- Losses for surviving family members and dependents, such as the loss of income that the deceased would have provided.
What Does PIP Insurance Not Cover?
Personal injury protection is designed to cover you and your passengers, and will not cover the other driver or their passengers after an accident.
In addition, PIP insurance does not cover:
- Injuries in an accident if you are driving for work-related reasons.
- Injuries from an accident while committing a crime.
- Damage to someone else’s property.
- Damage to your vehicle.
How Is Personal Injury Protection Coverage Different from Medical Payments Coverage?
While PIP insurance is similar to medical payments coverage, there is one key difference between the two.
Medical payments coverage—also known as Med Pay—only covers medical expenses for you and your passengers in the event of a covered auto accident. However, it does not cover any other expenses.
PIP coverage, on the other hand, ensures that other costs that relate to your injuries are also paid for.
Do You Need Personal Injury Protection?
Although PIP coverage is not available in all states, there are some states that require drivers to have personal injury protection in place, and others where PIP insurance is optional.
In addition to 12 no-fault states, there are an additional 4 fault-based states that also require you to have personal injury protection.
The other states in the U.S. allow you to purchase PIP as an optional coverage.
Key Point: What Is A No-Fault State? A no-fault state is a state where drivers are required to have a minimum amount of PIP coverage in addition to minimum liability coverage. After an accident has occurred, drivers in a no-fault state need to file a claim with their own insurance company for the costs of their injuries, regardless of who is responsible for the crash. In other words, drivers in no-fault states cannot rely on the other driver’s car insurance coverage to pay for their injuries after an accident, even when the other driver is at fault. It is important to note that no matter where you live in the U.S., liability insurance covers damages to property that an at-fault driver causes, even in no-fault states. While you will use your own personal injury protection to cover medical expenses for yourself and your passengers in a no-fault state, the other driver is still responsible for paying for damage to your car. |
In the table below, we provide you with the minimum coverage requirements for your state (where PIP is available). We also show which states are no-fault states and whether PIP is mandatory or optional.
| State | Minimum PIP Requirement | No-Fault State? |
| Delaware | $15,000 per person $30,000 per accident | No |
| Florida | $10,000 | Yes |
| Hawaii | $10,000 | Yes |
| Kansas | $9,000 | Yes |
| Kentucky | $10,000 | Yes |
| Maine | $2,000 per person | No |
| Maryland | $2,500 | No |
| Massachusetts | $8,000 per person | Yes |
| Michigan | $250,000 or opt out | Yes |
| Minnesota | $20,000 for medical expenses $20,000 for nonmedical expenses | Yes |
| New Hampshire | Optional | No |
| New Jersey | $15,000 | Yes |
| New York | $50,000 | Yes |
| North Dakota | $30,000 per person | Yes |
| Oregon | $15,000 per person | No |
| Pennsylvania | $5,000 per person | Yes |
| South Dakota | Optional | No |
| Texas | Optional | No |
| Utah | $3,000 per person | No |
| Virginia | Optional | No |
| Washington | Optional | No |
| Washington D.C. | Optional | No |
| Wisconsin | Optional | No |
It is important to note that Kentucky, New Jersey, and the District of Columbia are all PIP-optional, no-fault states.
This means that if you live in these states, you can decide whether you want to drive under the at-fault system or the tort liability system when it comes to your car insurance policy.
Key Point: What Is the Difference between the At-Fault System and Tort Liability System? In states that work on the at-fault system, you would file a lawsuit through the traditional tort system before claiming from your insurance company. The traditional tort system determines whether you can hold another person or entity responsible for your losses. In a no-fault state, on the other hand, you will be required to first exhaust all your own insurance and show that you are eligible to file a lawsuit against the at-fault party before you can go ahead and file. |
What If Your State Does Not Offer Personal Injury Protection?
In states where PIP coverage is not available, you will have the option to select medical payments coverage on your car insurance policy.
As we’ve mentioned already, Med Pay will not cover lost wages; however, it will cover funeral expenses and hospital bills for you and the passengers in your car, irrespective of who is at fault.
Although the coverage amounts for Med Pay differ per state, the limit is generally $10,000 or less. This means that this coverage should only be used to supplement your existing medical insurance policy.
How Much PIP Coverage Should You Get?
Everyone has a different set of financial circumstances and needs a unique insurance portfolio as a result of this.
A good starting place to consider how much PIP insurance you may need, is to think about the medical coverage that you may already have in place.
This can include your health insurance policy.
When you consider your health insurance policy, you will need to think about how much coverage you will have should you be involved in an accident.
Other considerations to keep in mind include your health insurance deductible. You may not want to be in a position where you need to pay two deductibles after an accident has happened and you need medical care.
Key Point: What Is a Deductible? A deductible is the amount of money that you need to pay toward a claim, before your insurance company will settle any expenses. |
Depending on the state that you live in, you may be able to customize your personal injury protection cover limits and deductibles.
You could for example be allowed to select:
- Your deductible amount.
- The priority of PIP coverage over health insurance.
- Your PIP coverage limit.
- The individuals covered on your insurance policy by PIP.
How Do You File a PIP Coverage Claim?
To submit a PIP claim, you will need to follow the same process as your would if you were filing any other type of insurance claim.
Personal injury protection will help pay for any necessary medical expenses immediately after an accident. However, for ongoing treatment, you will be required by your insurance company to have your treatment pre-approved.
Your car insurance company may also approve only a portion or a percentage of the costs that you need to cover, and may appoint a medical provider of their choice to assess your needs.
The amount that your policy will cover depends on the state that you live in, as well as the plan that you are on. In Florida, for example, PIP insurance will only cover 80% of your medical costs.
Each insurance company has its own specific process and timelines for approving claims. The following claims process will apply to most insurance providers:
Seek medical attention and keep documentation
After the accident, you may be taken to the emergency room for treatment or to the doctor for an assessment.
Be sure to keep all records of test results, office visits, medical bills, and other doctors’ reports. This will help you claim the accurate amount after the accident.
Contact your insurance company to file a claim
Prepare a list of the injuries that you have sustained, along with how much you’ve lost in wages and spent on childcare, homecare, and so forth. Share this information with your medical insurance adjuster.
Cooperate with the medical insurance adjuster
Your insurance company will assign an adjuster to review your case and verify the information that you have provided. When you respond to their questions promptly and provide accurate information, this process will be smooth and simple.
Review your settlement offer
Once the medical insurance adjuster has completed their assessment, you should receive a settlement offer from your insurance company, if the claim was accepted.
If you are uncertain about the details of the settlement, a bodily injury lawyer can help you to review the settlement and provide legal advice so that you receive what you are entitled to.
How Does PIP Coverage Work with Other Types of Insurance?
If you are involved in an accident and have personal injury protection as part of your insurance policy, you will typically exhaust your PIP coverage first, before turning to other medical insurance options.
If your medical bills exceed the limits of your PIP policy, you can then file a claim under the other driver’s bodily injury liability insurance.
Once both these options have been exhausted, you can turn to your own health insurance policy to collect the remaining balance of costs related to the accident.
Will You Pay More for Car Insurance If You File a Personal Injury Protection Claim?
There are a few states in which auto insurance companies can raise your insurance premiums at any time. Texas is one such example.
While you can have most of your medical expenses covered through your personal injury protection coverage, your insurer may raise your insurance rates if you file a claim.
If your car insurance company is going to raise your insurance premiums after a claim, this is a good time to start shopping around for cheaper insurance quotes.
Get Cheap Personal Injury Protection Coverage Today with CheapInsurance.com
Managing your health, let alone your finances after an accident, is extremely stressful. Your stress levels are sure to increase even further if you’re forced to pay higher insurance premiums after an unavoidable claim!
If your insurance company wants to raise your car insurance rates, it is time to start shopping around for cheaper options.
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Once you have an idea of the auto insurance premiums that you could be paying, it will be time for you to contact the insurers that are offering you the cheapest rates to get a formal quote.
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