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Personal Injury Protection (PIP) covers your medical bills when you or the passengers in your car get hurt in an accident. While it is optional in most states, it is required in 13 states. PIP tends to be faster than submitting a claim against the other drivers' insurance, However, it can overlap with your existing health insurance, creating some complexity in making claims. We explain all there is to know regarding PIP in the article below.
Table of Contents
- What Is Personal Injury Protection and What Is Covered?
- 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 the medical expenses for injuries sustained by you or your passengers in a car accident. It's known as "No-Fault Insurance" because your insurer pays out regardless of who is at fault. Since neither party has to prove fault or go to court as part of the claims process, payments tend to be faster than with some other types of auto insurance. It differs from Liability insurance, which covers any financial responsibility you may have for the other driver involved in the accident. Expenses for reasonable and necessary medical procedures, operations, hospitalization, rehabilitations, or professional care are typically covered under Personal Injury Protection. Other benefits may also be included, depending on your state and provider. Below are some examples of additional or optional 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. PIP can be nullified if motorists drive while intoxicated or while under the influence of drugs, or if they’re found to have caused the accident purposely.
Thirteen states currently require PIP coverage in auto insurance policies. Twelve, excluding Oregon, are considered true "No-Fault" states. 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-Fault" 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, such as dismemberment, for a person to sue. In Kentucky, damages have to exceed $1,000 before you can sue
Even if your state is not listed above, insurers in a number of other "fault", also known as "tort", states make PIP available as an add-on coverage to their policies. These states include Arkansas, Delaware, Maryland, New Hampshire, Oregon, coverages to their South Dakota, Texas, Virginia, Washington, and Wisconsin. Drivers in the District of Columbia can also elect to add PIP to their policies.
To provide an idea of the cost of PIP, we obtained auto insurance quotes from a representative insurance company, GEICO, for two states, Florida and Pennsylvania, that have mandatory no-fault coverage. Our quotes are for a 30-year-old single male driving a 2010 Toyota Camry. We also show the premium for the other major components of most auto-insurance policies, expressed as “50/100/50,” which reflects $50,000 for injury liability for one person, $100,000 for all injuries and $50,000 for property damage in an accident.
|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 these states, we see that no-fault benefits cost approximately 20% to 30% of the premium, at least in these two states.
How Does PIP Work With Other Types of Car Insurance?
If you are injured in an accident and have PIP included in your auto insurance policy, you would typically use PIP coverage first, to its financial limit, before turning to other options. However, if the injury is serious, you can potentially bypass the monetary threshold and take the negligent party to court. To do so, though, most states require that the accident has caused permanent or significant injury, such as the loss of a limb or function, permanent or significant scarring, or a permanent disability.
What if the injuries do not rise to the definition of serious, but your claim is nonetheless significant enough to exceed the limit of your PIP coverage? When your PIP policy limits are exhausted, you can recover leftover costs under the other driver's bodily injury liability. You can file a claim with the other driver’s 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; you have to meet certain monetary thresholds before you can launch a lawsuit. If you are considering legal action, you should seek the advice of an injury lawyer.
You submit a claim like any other type 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 of your insurer’s choosing or n outsourced medical claims processor. Your auto insurance provider 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. In New Jersey, for example, any medical care or treatment within the first ten days after the accident must be approved and certified by your insurer. Failure to provide the required “Attending Provider Treatment Plan” and its documentation can result in a co-payment penalty of as much as 50% (regardless of whether the procedure or diagnostic test was medically necessary or reasonably required). New York requires all medical bills to be submitted within 45 days of treatment to be considered for payment; otherwise, written explanations must be provided. Below are some helpful resources:
Should You Get PIP Even If It Isn't Required By Law?
Even if you’re insured in a state that doesn’t require PIP, the coverage may still be worthwhile to buy. If you need to pay for medical expenses, and do not have high limits on your health plan, you would otherwise have to file a claim against the driver involved in the crash. That other driver would need to be found totally or partially at-fault in order for you to receive compensation. If you have PIP on your policy, by contrast, it won’t matter who is at-fault in an accident.
In addition, even if the other driver was at-fault, you will need to go through the burden of proving that fact to the other insurance company. You will have to show a police report or even witness testimony to validate that the other driver can indeed be blamed. This process may also require hiring a lawyer.
The next time you shop for car insurance, or on your next policy renewal, consider adding PIP if your state offers it.
As we cover in more detail here, PIP and health insurance are similar and can complement one another. As covered earlier, if you are injured in an accident, it’s expected, even required, that you exhaust the limits of your PIP coverage before tapping into your health policy. A few states, including New Jersey and Michigan, have provisions where your PIP will work in conjunction with your health-insurance policy. In Michigan, for example, you can arrange to have your health policy cover your physical injuries, and your PIP would then cover any economic losses due to injury.
PIP also has several benefits unavailable with a standard health policy. The most significant is coverage for lost wages and funeral costs. A standard health policy won't cover those expenses, but PIP will.