Personal injury protection (PIP) is an auto insurance coverage that reimburses you and your passengers for medical expenses, lost earnings, and other expenditures incurred as a result of an auto accident, regardless of who was at fault.
In this guide, we’ll go over how this coverage works, what’s covered, and where it’s necessary in the sections below. Carefully read through.
Table of contents
- What is Personal Injury Protection?
- How Does PIP Insurance Work?
- What Does PIP Insurance Cover?
- Minimum PIP Requirements by State
- How Much PIP Coverage Should You Have?
- What Are The Cheapest Insurance Companies That Offer A PIP Claim?
- How Do You File a PIP Claim?
- Do I Need Personal Injury Protection (PIP)?
- Do I Need PIP if I Have Health Insurance?
- How Does PIP Work with Other Types of Car Insurance?
- No-Fault States Or Personal Injury Insurance States
- Should I Get Medical Payments Insurance on Top of PIP?
- Frequently Asked Questions
What is Personal Injury Protection?
After you and your passengers are harmed in a car accident, personal injury protection (commonly known as “no-fault insurance”) pays for your medical bills and rehabilitative costs. PIP also covers you if you’re a passenger in someone else’s automobile or if you’re a pedestrian or cyclist who is hit by a car.
PIP insurance differs from bodily injury liability insurance in that, although PIP covers your personal expenditures, liability insurance covers the medical expenses of other drivers and passengers in other cars if you are at fault in an accident.
Some of the coverage provided by PIP insurance may be similar to that provided by your health insurance or Medical Payments policy. PIP insurance, on the other hand, is designed expressly for car-related injuries, which are occasionally excluded from health insurance policies, and it covers a number of additional expenses not covered by MedPay.
How Does PIP Insurance Work?
In the 1970s, legislation established the no-fault system to make it quicker and easier for accident victims to collect compensation, regardless of who was at fault. Financial losses such as medical expenditures are covered by each party’s own insurance carrier under this method, rather than waiting for insurers to agree on who was at fault—and legally liable—for accident costs.
After an accident, policyholders in states where PIP is mandatory or optional have the right to seek compensation from their own insurance provider. You can only sue the other motorist for additional medical expenditures or pain and suffering if your injuries meet a state-specific tort threshold in some of these states, known as no-fault states. Thresholds can be expressed in language words, such as death or major disfigurement, or in monetary terms, such as minimum medical bill amounts.
Let’s imagine you’re a Utah policyholder who is involved in a car accident. Your PIP maximum is $3,000, and your state has a $3,000 tort barrier. Because your accident-related medical expenses total $2,500, your insurance will cover the entire amount because it is less than your PIP limit (as long as you’re eligible—see the next section). You cannot sue the driver who hit you for pain and suffering since your medical bill is below the tort threshold.
Unlike no-fault systems, states with “add-on” car insurance legislation have no restrictions on lawsuits. However, like in no-fault states, drivers are compensated by their own insurers. PIP coverage is still compulsory in some of these states, while it is optional in others.
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What Does PIP Insurance Cover?
PIP may cover the following items if you’re in an accident, even if you weren’t driving, depending on your state:
- Medical bills for all policyholders (including when hit as a pedestrian, cyclist, or passenger in another car).
- If your injuries prevent you from working, you and your passengers will lose money.
- If you’re self-employed, the cost of employing temporary labor to help with your workload.
- Expenses for a funeral, burial, or cremation following a car accident.
- Expenses for disability and rehabilitation.
A parent’s automobile insurance policy automatically covers children who live at home or are away at school. In general, anyone above the age of 14 who lives in your home should be listed on your policy, even if they don’t have a driver’s license, however insurers may have different minimum age restrictions.
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Your insurance company may refuse to pay PIP compensation in the following circumstances:
- Accident was caused on purpose
- If the driver got injured while committing a felony
- If you get hurt while driving an insured vehicle.
- Was driving a car that they owned but was not listed on their insurance coverage.
Furthermore, passengers or relatives who reside with you and own cars may be excluded from your PIP coverage. They may have to pay for PIP on their own.
Minimum PIP Requirements by State
Because a minimum amount of PIP coverage is required if you live in a no-fault state, PIP insurance is also known as “no-fault insurance.” Unless a particular level is met, your personal insurance policy in some states will cover your charges, even if another driver was at fault. Depending on your state, these so-called “tort thresholds” can be monetary or verbal.
How Much PIP Coverage Should You Have?
Your state may choose the amount of PIP coverage required. In Michigan, for example, PIP is required to be unlimited. As a result, Michigan residents must pay exorbitant vehicle insurance premiums. In some areas, such as Florida, PIP must cover 80% of medical expenditures and 60% of lost wages, up to $10,000.
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What Are The Cheapest Insurance Companies That Offer A PIP Claim?
Depending on your company and the circumstances of the claim, the amount you will pay after filing a PIP claim will vary significantly. Using a sample driving profile, we calculated a national average rate after a PIP claim. After one PIP claim, USAA is the cheapest insurance provider, followed by GEICO and State Farm.
- Allstate $1,021
- Farmers $716
- GEICO $657
- Liberty $841
- Nationwide $675
- Progressive $790
- State Farm $664
- USAA $487
How Do You File a PIP Claim?
You file a claim in the same way you would for any other sort of insurance, either online or over the phone. PIP will assist in the payment of emergency medical expenditures incurred as a result of the accident. However, you’ll be forced to evaluate or pre-approve your treatment plan with a medical expert chosen by your insurer or an outsourced medical claims processor for ongoing, non-urgent claims.
Your car insurance company may also allow partial reimbursements or have you examined by a doctor of their choosing. The amount covered by your policy varies depending on your plan and state. In Florida, for example, PIP coverage will only cover 80% of your medical expenses.
It’s vital that you stick to your auto insurance company’s procedures and timelines. In New Jersey, for example, any medical treatment or care given during the first 10 days after an accident must be approved and certified by your insurance company. Whether or not the treatment or diagnostic test was medically necessary or reasonably required, failure to deliver the requisite “Attending Provider Treatment Plan” and related documentation can result in a co-payment penalty of up to 50%.
To be eligible for payment in New York, all medical invoices must be presented within 45 days of treatment; otherwise, written justifications must be provided. If you’re injured, ask your insurance agent about their PIP claim process criteria and keep a copy on hand.
Do I Need Personal Injury Protection (PIP)?
Yes, you must have PIP coverage if you live in a state that mandates it. Then there’s the matter of deciding how much you should spend. If your health insurance covers injuries and rehabilitation as a result of an automobile accident, you may just need to buy the state’s minimum amount of PIP. If PIP coverage is optional in your state, you should review your health insurance to see how it covers expenses connected to automobile accidents, as well as your deductible and out-of-pocket maximums, to help you decide.
Do I Need PIP if I Have Health Insurance?
If you live in a state that mandates PIP coverage, you must have it. Then there’s the matter of how much you should get. If your health insurance covers injuries and rehabilitation as a result of an automobile accident, you might only need to buy the bare minimum of PIP coverage mandated by your state. Similarly, if PIP coverage is optional in your state, review your health insurance policy to see how it covers expenses connected to automobile accidents, as well as your deductible and out-of-pocket maximums, to help you decide.
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How Does PIP Work with Other Types of Car Insurance?
If you’re hit by a car and have personal injury protection (PIP) as part of your auto insurance policy, you’ll usually use up your PIP coverage before looking into alternative options. If your medical expenses exceed your coverage’s limits, you can file a claim under the liability insurance policy of the other driver. However, if you are seriously and permanently wounded, or if your medical expenditures surpass your state’s tort threshold, you may be able to launch a lawsuit against the other motorist, bypassing your PIP coverage.
Read also: Why Is Car Insurance So Expensive In 2023?
No-Fault States Or Personal Injury Insurance States
In states with no-fault insurance laws, every driver, regardless of who caused the accident, must make a claim with their own insurance company following an accident. As a result, all drivers must purchase personal injury protection coverage as part of their auto insurance policies.
States with no-fault coverage laws are:
- New York
- North Dakota
At-Fault States Where PIP Is Required
Personal Injury Protection (PIP) is included in auto insurance. In at-fault states, the driver’s insurance carrier is responsible for paying for injuries up to the policy limitations.
States with at-fault laws that require PIP coverage are:
At-Fault States Where PIP is Optional
PIP insurance is also optional in the following states:
- New Hampshire
- South Dakota
Should I Get Medical Payments Insurance on Top of PIP?
Both PIP and MedPay insurance are designed to cover medical expenses incurred as a result of an automobile accident. MedPay, on the other hand, does not cover many of the extra expenses that PIP provides, such as lost income, rehabilitation programs, or childcare.
As a result, if you live in a state where PIP coverage is available, MedPay may be unneeded. In Michigan, for example, insurers are required to provide maximum PIP coverage, therefore additional MedPay coverage would be unnecessary.
A medical payments policy, on the other hand, may provide extra coverage if your state has a low restriction on how much PIP insurance it requires. Three of these states are Florida, Kansas, and Massachusetts. Consider adding MedPay insurance to your policy if you live in one of these states.
Personal Injury Protection (PIP) insurance is a difficult product to understand. You only have a limited amount of time after an accident to file a claim for PIP benefits. Claimants may get payments, but they may not receive the whole amount of the benefit to which they are entitled. It is advised that you seek legal advice.
Frequently Asked Questions
After you and your passengers are harmed in a car accident, personal injury protection (commonly known as “no-fault insurance”) pays for your medical bills and rehabilitative costs.
Your state may choose the amount of PIP coverage required. In Michigan, for example, PIP is required to be unlimited.
You file a claim in the same way you would for any other sort of insurance, either online or over the phone.
In states with no-fault insurance laws, every driver, regardless of who caused the accident, must make a claim with their own insurance company following an accident.
- investopedia.com – Personal Injury Protection
- thebalance.com – What Is PIP Insurance?
- valuepenguin.com – What is Personal Injury Protection (PIP) and Do You Need It?
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