UPDATED: Mar 13, 2020
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Last Updated: November 24, 2018
When you buy your first car insurance policy, you’ll be blown away by the myriad of words you’ve never seen before – terms such as comprehensive coverage, no-fault laws, and limited tort probably mean nothing to you. Of course, your friendly car insurance agent will go through these coverage types, conditions, and terms with you, but chances are that you’ll tune-out about two minutes into the conversation. There is one type of coverage that you must understand, however, even if have absorbed more than your fill of auto insurance lingo. That coverage is “Personal Injury Protection“.
What Is Personal Injury Protection?
Personal Injury Protection (PIP) is an auto insurance coverage type that covers any medical expenses, and, in certain insurance policies, lost wages and other costs resulting from an auto accident.
PIP is sometimes viewed as an extension of car insurance – it extends coverage to yourself and your passengers. Why passengers, you ask? This type of auto insurance coverage will payout for anybody involved in the auto accident. Since your passengers are considered to be involved in the accident you get into, your PIP will pay for their medical bills and other costs as well.
PIP is also viewed as “no-fault coverage”, as it is mandatory in states that have the no-fault law in place for drivers to be covered under PIP. In no-fault states, insurance companies are to cover damages to the insured party regardless of who the at-fault party is.
If you’ve heard of “Medical Payments Coverage” or “Med Pay Insurance”, you might be thinking that personal injury protection sounds quite similar. PIP and medical payments coverage both pay for medical bills resulting from an accident. The difference between the two is that PIP is more comprehensive and covers more, while medical payments coverage is more of a “basic coverage”. PIP, therefore, is the more expensive choice of the two.
Who Does PIP Cover?
It may seem like a nonsensical question to ask – the person who is insured is covered, of course! However, what many people do not know is that PIP also covers the passengers of the driver involved in the accident and even pedestrians who are involved in the accident. Basically, personal injury protection coverage pays out for anybody who is involved in the auto accident.
Here’s a list of some of the things that PIP will pay for:
- Medical treatment
- Ambulance fees
- Hospital Stays
- Long-term professional care
- Lost wages
- Funeral expenses
- Home care expenses (such as childcare, lawn mowing, house cleaning, etc.)
However, it should be noted that PIP does not cover motorcycles, off-road vehicles, and farming equipment (such as harvesters). It is possible to get a quote for coverage that offers a similar package as PIP for those types of vehicles, but it will be ridiculously expensive, especially for motorcycles. For motorcycle drivers, you might be better off buying health insurance instead.
In addition, PIP does not cover racing events – this means that if you crash your vehicle while racing your car, and incur medical expenses due to the crash, the expenses cannot be claimed from your PIP.
I’m Still Not Convinced Why I Should Get PIP…
If you are still not convinced why you should always get PIP, here’s the best reason – PIP will payout maximum benefits in an auto accident, even if you’re the one at fault. There will not be any legal costs, as fault-finding and lawsuits are restricted under the no-fault law (which usually requires PIP coverage), leaving you in a much better financial situation than if you are not covered by PIP. It will even cover things like transportation to doctor’s appointments and home care while you are injured.
States That Require Personal Injury Protection Coverage
Of course, if you’re adamant about not getting PIP, then you should know this – as long as you live in a state that has no-fault laws, PIP coverage is mandatory. The states where PIP coverage is required by law include Minnesota, Florida, Kansas, Pennsylvania, Kentucky, Hawaii, Massachusetts, Michigan, New Jersey, New York, North Dakota, and Utah. It is also mandatory in Washington, D.C.
If you don’t live in any of those states, but still wish to buy PIP, you might be in luck. In these other states, PIP coverage is available, but optional: Alaska, Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Georgia, Idaho, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Mexico, Nevada, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Tennessee, Texas, Virginia, Verman, Washington, Wisconsin, West Virginia and Wyoming.
What If I’m Already Covered By Health Insurance?
This issue has been raised many times – do you still need PIP if you have health insurance coverage? If we exclude people who live in no-fault states (as they’ll have to get PIP even if they’re already covered by health insurance), it doesn’t actually make sense to get PIP if you already have a personal health insurance policy in place. The reason for this is that your current health insurance coverage might actually already cover medical expenses and loss of wages from a car accident.
However, if your occupation or lifestyle requires you to be frequently on the road, and requires you to carry passengers, it’s recommended that you still purchase PIP. In the event that you are involved in an accident, PIP will help you to pay for medical expenses incurred by your passengers. Without the PIP, you might become neck-high in debt from medical expenses your passenger might try to make you pay.
Final Word on Personal Injury Protection
Personal injury protection is great because when it comes to medical bills, it doesn’t matter who is at fault in the accident. PIP removes blame from the equation and will pay out regardless of who is at fault. This type of coverage is highly recommended for drivers who often drive with other passengers in their car (and don’t want to be responsible for their medical bills) and for drivers who do not have adequate health insurance coverage.
If you are in a no-fault state or your state offers PIP and you want to add this type of coverage to your auto insurance policy, please contact your auto insurance provider today to talk to them about getting covered.