December 27, 2019

PIP Insurance

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Personal injury protection (PIP) can provide extra financial protection if you or a passenger is injured in a car accident. It's not required in all states, but should you have it regardless? Read on for the benefits and limits.

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What Is Personal Injury Protection?

Also known as "no-fault insurance," Personal Injury Protection (PIP) includes some of the same coverage as your health insurance or a medical payments insurance policy. But it's specifically written for auto-related injuries.

PIP can provide coverage for:

  • Medical bills and rehab costs for you and/or your passengers after an auto accident

  • Costs if you are injured as a passenger in someone else's car

  • Injuries if you are hit by a vehicle while walking or bicycling

If you're injured by another driver and have PIP, you would typically use that coverage first. If your medical costs exceed your PIP coverage limits, you can then file a claim against the other driver's liability insurance.

PIP vs Bodily Injury Liability
PIP generally covers:
  • You
  • Drivers listed on your policy
  • Your passengers

Bodily injury liability insurance pays for medical expenses for drivers and passengers in other cars if you cause an accident.

What Does PIP Cover?

Personal injury protection covers medical procedures and related medical expenses following an auto accident. Though expenses covered can vary by state, they can include:

  • Operations
  • Hospitalization
  • Ongoing professional care or rehabilitation
  • Lost wages if you are unable to work due to injuries
  • Funeral expenses and accidental death benefits
  • Home care expenses, like childcare or house cleaning

Do I Need Personal Injury Protection Coverage?

You are required to have PIP coverage if you live in any of these states:

  • Arkansas
  • Delaware
  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Oregon
  • Pennsylvania
  • Utah

These states require you to file a claim under the PIP policy before your health insurance coverage will kick in.

Even if you don't live some place where PIP coverage is required, it can offer benefits that health insurance doesn't, such as coverage for lost wages and/or funeral costs.

You should consider PIP coverage if you:
  • Don't have a great health insurance plan
  • Are responsible for the medical expenses of your passengers if an accident occurs

Benefits of Personal Injury Protection

Specific Coverage for Auto Accidents
PIP offers protection from costly medical expenses after an auto accident. If your health insurance doesn't provide great post-accident or medical benefits, PIP protection can provide additional coverage.

Coverage Above and Beyond Health Insurance
Personal injury protection can also provide protection that health insurance can't, including:

  • Lost wages
  • Medical expenses
  • Substitute service needs
  • Childcare
  • Home cleaning
  • Funeral costs

Fault Is Irrelevant
It doesn't matter who was at fault for the accident with PIP coverage. If the incident is covered, you only have to deal with your insurance company for immediate payout. You won't have to wait for the insurance company to determine blame, make payments, or file a lawsuit.

Extended Coverage to Passengers
PIP is extended to your friends and family after a covered accident.

Personal Injury Protection Limits

Twelve no-fault states require minimum PIP coverage. "No-fault state" auto insurance laws require every driver to file a claim with their own insurance company after an accident, regardless of who was at fault.

Here are the no-fault states:

  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Pennsylvania
  • Utah

The term "no-fault" only applies to state laws that both:

  • Provide for the payment of no-fault first-party benefits
  • Restrict the right to sue the other driver

Under the no-fault laws, you may sue for severe injuries and for pain and suffering only if certain conditions (or "thresholds") are met.

A PIP insurance policy will cover your expenses, no matter who was at fault, until a certain threshold is met. These thresholds, also known as tort thresholds, may be monetary or verbal. Check with your insurance company to learn about your specific state and policy.

Additional States with PIP Requirements
Here are four states that require PIP coverage, but are not no-fault states:

  • Delaware
  • Arkansas
  • Maryland
  • Oregon

Other areas allow you the option to carry PIP coverage. These include: District of Columbia, New Hampshire, South Dakota, Texas, Virginia, Washington, and Wisconsin

Thresholds and Minimums

StateMinimum PIP RequirementNo-Fault State?Tort Threshold
Delaware$15,000/person; $30,000/accidentNoNo
Maine$2,000/person medical expensesNoNo
Minnesota$20,000/medical expenses; $20,000/non-medical expensesYes$4,000
New Hampshire**OptionalNoNo
New Jersey$15,000YesVerbal*
New Mexico**OptionalNoNo
New York$50,000YesVerbal
North Carolina**OptionalNoNo
North Dakota$30,000/personYes$2,500
Rhode Island**OptionalNoNo
South Carolina**OptionalNoNo
South DakotaOptionalNoNo
Washington DCOptionalNoNo*
West Virginia**OptionalNoNo

**PIP insurance coverage is available but not required.

Kentucky, New Jersey, and DC operate as optional no-fault states. That means policyholders can elect either to operate under the no-fault system, or to operate under a tort liability system so they can file a lawsuit immediately.

PIP Insurance Costs

Typically, PIP coverage costs between 15% and 20% of your total auto insurance rate. If your auto rate is $100 per month, your PIP coverage would be about $15 to $20.

The total cost of PIP coverage varies based on a variety of circumstances, such as:

  • Your age
  • Type and age of your vehicle
  • State you live in
  • Driving history
  • Credit score

How Do You File a PIP Claim?

You can usually file a PIP claim online or over the phone. It's important to follow the process and timelines of your insurance company and the state in which you live.

For example, there may be a certain amount of time after the accident that medical care must be approved and certified by your insurer. Failure to follow the process or timelines can result in a penalty fee, or even denial of your claim. Talk to your insurance agent to learn your policy's PIP claim process requirements.

PIP will help pay for your medical expenses immediately after the accident. But for non-urgent, ongoing claims, you'll be required to review or pre-approve a treatment plan with a medical expert of your insurer's choosing. The amount your policy covers may vary depending on your coverage plan and the state you live in.

Bottom Line

If your state requires PIP coverage, you must have at least the state minimum. Even if you don't live in a no-fault state, you may opt to have PIP coverage to provide additional protection in case you or your passenger is injured in an auto accident.

It's relatively inexpensive (average 15% to 20% of your auto coverage), but can provide you additional protection your health insurance cannot.

Talk to your insurance agent about your circumstances to learn if additional PIP coverage is right for you.

Write to Caitlyn Callahan at Follow us on Twitter and Facebook for our latest posts.

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