How Does PIP Insurance Work in Maryland?

How Does PIP Insurance Work in Maryland?

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Personal injury protection is not mandatory in Maryland. However, Maryland insurance companies are required to offer a minimum of $2,500 of PIP coverage when writing auto insurance policies. You can waive PIP coverage for yourself, however, you typically cannot waive it for passengers riding in your car or any pedestrians you may injure. If you carry PIP insurance, it will cover medical expenses for you and your passengers if you're involved in an accident, before your medical insurance kicks in.

What Does Personal Injury Protection (PIP) Cover?

PIP insurance, sometimes called no-fault insurance, is a form of auto insurance coverage that pays for your medical and disability expenses, as well as those of your passengers, regardless of who was at fault for an accident. PIP insurance provides primary coverage, which means it may need to be used before your health insurance policy would kick in. Here are some of the medical expenses that personal injury protection would cover:

  • Hospitalization fees
  • Surgery expenses
  • Therapy or rehabilitation expenses

In addition to medical expenses, PIP insurance provides some death and disability benefits that you may not find through a MedPay insurance policy. For example, if you or a passenger were killed in a car accident, the PIP policy would cover funeral expenses. Or, if you were left unable to work due to injuries, the insurance would reimburse you for 85% of lost wages, up to the limits of the policy.

PIP insurance will only reimburse you up to your policy's limits, which could be lower than the total cost of your medical bills.

For example, if you have $5,000 of personal injury protection, but the combined cost of your medical expenses and the 85% of your lost wages is $20,000, your PIP insurance could reimburse you for $5,000, but won't cover the $15,000 that exceeds your coverage limit.

Instead, you'd need to turn to your medical insurance, disability insurance or the at-fault driver's liability insurance policy, if you weren't the cause of the accident.

What is excluded from PIP coverage in Maryland?

Your PIP insurance won't provide reimbursement for your car repairs or for any damage you cause to other people's property. It only covers medical expenses and lost wages. Other notable exemptions from PIP coverage include buses and taxis. If you're injured in a bus or taxi in Maryland, you will not receive PIP coverage under that vehicle's insurance policy.

However, if you carry your own PIP coverage, you may still be able to file a claim, even though your vehicle was not involved in the accident. Similarly, most insurance companies do not offer PIP coverage as a part of their motorcycle insurance policies. However, if you're riding a motorcycle and are hit by another driver who carries PIP insurance, you may be able to file a PIP claim under their policy.

How much does PIP insurance cost in Maryland?

The total cost of your PIP insurance may vary depending on factors such as your driving history, age and the amount of coverage. The state of Maryland does not require you to carry PIP coverage, but auto insurance companies are mandated to offer a minimum of $2,500 of PIP insurance. If you add PIP coverage, we recommend comparing quotes from multiple insurers in order to get competitive rates.

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If you do not want to purchase personal injury protection for yourself, you may need to complete an electronic waiver declining coverage. While you may waive PIP coverage for yourself, you cannot waive it on behalf of guests you may have in your car. Because of this, you'll need to select a coverage amount for passengers, even if you decline it for yourself.

Here are some examples of PIP insurance premiums offered to a 30-year-old male driver in Maryland:

PIP Coverage Limit
Total Cost (Six-Month Policy)
Cost if Waived for Policyholder
$10,000$81.49$20.57
$7,500$71.20$17.81
$5,000$56.96$14.24
$2,500$39.56$9.89

How will a PIP claim affect my rates?

Maryland car insurance companies are barred from applying a rate surcharge to drivers who file PIP claims. So, a PIP claim will not affect your rates, and you should not hesitate to file a claim under your personal injury protection.

But keep in mind that other claims, such as one filed under your collision coverage, could increase your premiums. How much a claim might increase your rates is based on factors like the amount of fault you bear for an accident, the total amount of the claim and any previous claims within the past three years.

Drivers who file a claim often see rate increases between 23% and 33% of their base policy premiums. If you file multiple claims within three years, and you were at fault, you will likely see a drastic increase in your rates.

Who is covered by my PIP insurance?

A typical PIP insurance policy covers the policyholder as well as any passengers in their car, any authorized drivers of the insured vehicle and any pedestrians hit by that car. Each person involved is entitled to the full PIP policy limit, as long as they haven't declined PIP coverage on their own auto insurance policies.

For example, say you carry $5,000 of PIP insurance and have two passengers in your car, and you accidently hit a pedestrian. If every person involved is injured in the accident, you are each entitled to $5,000 of PIP reimbursement for your medical expenses. However, if one of your passengers or the pedestrian has a vehicle registered in their name in the state of Maryland, and they declined personal PIP coverage on their own auto insurance policy, they are not entitled to any PIP insurance from yours. But the pedestrian would be entitled to file a claim under your liability insurance coverage, regardless of their own policy.
Person
Waived PIP Coverage on Their Own Auto Policy?
PIP Entitlement
DriverNo$5,000
Passenger ANo$5,000
Passenger BYes$0
PedestrianNo$5,000

When purchasing an auto insurance policy in Maryland, you may choose to waive or accept PIP coverage for yourself, others named on the policy, as well as family members who are at least 16 years old and live in your home. If you decline the coverage, you must still select a coverage limit for passengers in your vehicle. The only people who may decline PIP coverage completely are those who meet each of the following criteria:

  • The policy you are applying for provides only the minimum liability coverage required in Maryland.
  • Prior to the application, you were insured by a company other than the Maryland Automobile Insurance Fund.
  • The insurer under the prior policy canceled the policy before the end of its term.

How to file a PIP claim

We recommend contacting your insurance agent to initiate your claim as early as possible. They will help you understand how you're covered and guide you through the claims process. PIP claims must be filed within one year of the incident. If you do not file your claim within one year, you may be denied coverage. Also, filing your claim early will help you gain access to necessary reimbursement funds more quickly.

Regardless of whether you're submitting your PIP insurance claim before or after you receive medical attention, you need to make sure you document evidence of all injuries, lost income and medical procedures to serve as proof to support your claim. Save all receipts or statements of medical services rendered, doctor's notes and photographs of your injury.

Finally, you may choose to take advantage of Maryland's collateral source rule to increase your claim benefits.

What is the collateral source rule?

Under Maryland law, PIP insurance is non-subrogable, meaning the payment of a PIP claim by one insurance company does not preclude other individuals or institutions from liability, and your insurer cannot recover from you any money paid by another source.

If you're injured by another driver and file a claim under your own PIP coverage to pay for your medical expenses, you may also file a claim with the at-fault driver's liability policy. If you receive a payment from the other driver’s insurer, your own insurer cannot recoup from you any PIP payments made to cover costs related to your injuries.

Say you carry $2,500 of PIP insurance, and you're rear-ended by another driver. You incur $3,000 in medical expenses and $2,000 in recoverable lost wages. Filing a claim under your own PIP policy, you could receive a maximum of $2,500—half of your total expenses. However, you could also file a claim for the same expenses under the other driver's liability policy to gain an additional $5,000, bringing your total reimbursement to $7,500.

This can be critically important if you're unable to work for an extended period of time and your lost wages and medical expenses exceed your own PIP policy's limit. However, it doesn’t reduce the importance of having sufficient PIP insurance of your own, as you may incur high medical bills in an accident for which you are at fault.

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