Personal Injury Protection (PIP) covers your medical bills when you or your passengers in your car get hurt in an accident. There are 13 states that require you to have personal injury protection in car insurance policies, and it is optional elsewhere. It tends to be faster than submitting a claim against the other drivers' insurance, but can overlap with your existing health insurance. We explain all there is to know regarding PIP in the article below.
Table of Contents
- What is Personal Injury Protection and What Does it Cover?
- What are the Required Amounts of PIP by State?
- How Much Does PIP Cost?
- How Do You File a PIP Claim?
- PIP vs Health Insurance
PIP pays for medical expenses for injuries sustainted by you or your car's passengers in an accident. It's known as "No-Fault Insurance" because your insurer pays out regardless of who is at fault for the accident. Payments tend to be faster, because people don't have to prove fault or go through courts. It is different from "liability" insurance, as that type is meant to cover the expenses of another driver.
Expenses for reasonable and necessary medical procedures, operations, hospitalization, rehabilitations, or professional care are generally covered under personal injury protection. Other benefits can also fall under your PIP depending on your state and provider. Some examples of additional or optional PIP features:
- Lost earnings and other economic losses due to your injury
- Replacement or substitute services, such as household cleaning or childcare
- Funeral expenses, and accidental death benefits
- Injuries sustained as a pedestrian
- Injuries from an accident in a public bus or school bus
Note personal injury protection does not cover non-economic losses such as damages due to pain and suffering. Also, if motorists are driving while intoxicated or under the influence of drugs, or purposely causing the accident, their personal injury protection benefits may be nullified.
Thirteen states currently require PIP coverage in auto insurance policies for their drivers. Twelve are considered true "No-Fault" states while the one, Oregon, is not. We've shown below the coverage limits in general per person, per accident terms.
|Coverage by State||Minimum PIP Limits|
|Kansas*||9,000 (and others)*|
*In Kansas, PIP has a number of components that are required by law: $4,500/person for medical expenses; $4,500 for rehabilitation expense; $900/month for one year for disability/loss of income; $25/day for in-home services; and $2,000 for funeral, burial or cremation expense. In Minnesota, the $40,000 is split between $20,000 for medical and hospital benefits, and $20,000 for non-medical expenses. PIP is provided in Pennsylvania as "medical benefits" or auto medical payments.
**Oregonians are required to carry PIP, but the state is not considered to be a "No-Faut" state. Essentially, in true "No-Faults", drivers are not allowed to sue other drivers unless their bills exceed a certain threshold. For example in New York, there has to be a serious injury, like dismemberment, for someone to be allowed to sue. In Kentucky, damages have to exceed $1,000 before you can sue. In Oregon, no such limit exists, thus it is not a "No-Fault" state that also happens to require PIP.
Even if your state is not listed above, insurers in a number of other "fault" or "tort" states make PIP available as add-on coverages to their policyholders. These states are: Arkansas, Delaware, Maryland, New Hampshire, Oregon, South Dakota, Texas, Virginia, Washington, and Wisconsin. Drivers in the District of Columbia can also elect to add PIP to their policies.
We researched auto insurance quotes in two states with mandatory no-fault coverage for a 30 year old single male driving a 2010 Toyota Camry to give drivers an idea of how much their PIP premiums could cost.
|State||No-Fault Coverage||50/100/50||PIP||PIP % of Total|
|Florida||$0 PIP Deductible, $10,000 PIP||$370||$167||31%|
|$250 PIP Deductible, $10,000 PIP||370||151||29%|
|$500 PIP Deductible, $10,000 PIP||370||144||28%|
|$1,000 PIP Deductible, $10,000 PIP||370||139||27%|
|Pennsylvania||$5,000 Medical Payments||688||138||17%|
|$10,000 Medical Payments||688||171||20%|
|$25,000 Medical Payments||688||210||22%|
|$50,000 Medical Payments||688||250||27%|
Looking at Florida and Pennsylvania, we see that no-fault benefits cost roughly between 20% and 30% of the premium. Granted, each state's PIP is different. In states like New York and Minnesota where mandatory PIP is over $40,000, it may be pricier. It will also depend on the company, the quotes above are for GEICO. Fraud also plays a role. It has been estimated that 22% to 31% of PIP claims in Florida, New York, Massachusetts, and Minnesota were fraudulent or exaggerated. Overall, the more quotes you get, the better your chances of finding the cheapest car insurance rates.
How Does PIP Work With Other Types of Car Insurance?
If you are injured in an accident, you would use all of your PIP benefits first. There are two situations when filing a claim against the other party's bodily injury liability or launching a lawsuit can come up: when you have medical bills or economic losses beyond your own PIP limits, or when you're injured seriously in the accident.
When your PIP policy limits are exhausted, you could recover leftover costs under the other driver's bodily injury liability. You can file a claim with the negligent party's auto insurance company, or consult with a lawyer and file a lawsuit. In some no-fault states, your ability to sue the other driver is limited, and you might have to meet certain monetary thresholds before you can launch a lawsuit. If there is a serious injury, you can potentially bypass the monetary threshold and take the negligent party to court. Most states will require that the accident result in permanent or significant injury, such as the loss of a limb or function, permanent or significant scarring, or even disability. You should seek the advice of an injury lawyer if you're considering this.
You submit a claim like other types of insurance, either online or through the phone. PIP will kick in immediately to cover any emergency medical expenses. After that, you'll be required to review or pre-approve your treatment plan with a medical expert your insurer picks, or even an outsourced medical claims processor. In New Jersey, any medical care or treatment in the first ten days after the accident will need to be cleared and certified with your insurer. Your auto insurance provider or its processor can also approve partial reimbursements, modify your treatment plan, or even have you examined by a medical provider of their choice.
It's critical to follow your auto insurance company's process and timeline. Failure to provide the Attending Provider Treatment Plan and its documentation in New Jersey can result in a co-payment penalty as high as 50% (regardless of whether the procedure or diagnostic test was medically necessary or reasonably required). In New York, all medical bills must be submitted within 45 days of treatment to be considered for payment, otherwise, written explanations must be provided. Not all bills will arrive in time or all at once, and policyholders might still be recuperating - all of this makes following timelines and keeping track of paperwork difficult. Each state and company will be different. Below are some helpful resources:
Should You Get PIP Even If You Aren't Required?
Even if you are from a state that does not require PIP it may still be worthwhile to have on your policy. If you need to pay for medical expenses, and do not have high limits on your health plan, you will need to file a claim against the driver you crashed into. This can be a problem. The other driver will need to have been totally or partially at-fault for you to receive compensation. If the accident was entirely your fault, even if you are injured, you are not entitled to compensation. Having PIP on your policy will allow you to avoid that issue since it doesn't matter who is at-fault in an accident.
Next, even if the other driver was at-fault, you need to go through the burden of proving it to the other insurance company. You will have to show a police report or even witness testimony proving the other driver can be blamed for it. This process may also require bringing on a laywer. Again, having PIP would reduce this issue since you are going through your own insurance company.
The next time you shop for car insurance, or on your next policy renewal, consider adding PIP if your state offers it. Even a few thousand dollars of coverage may be worthwhile to have and not too expensive to purchase.
As we go into more detail here, PIP and health insurance are both similar and complimentary. If you are injured in an accident, it is expected you would exhaust your PIP limits before tapping into your health policy. A few states like New Jersey and Michigan have provisions where your PIP will work in conjunction with your health policy. In Michigan, for example, you can set it so your health policy covers your physical injuries while your PIP would cover economic losses due to injury.
PIP also has several benefits unavailable to a standard health policy. The most significant is paying for lost wages and funeral costs. A standard health policy won't cover those expenses while PIP will. If you are too injured to work, you may lose thousands of dollars a month in wages. It will be comforting to have a PIP policy which will spare you those lost earnings.