Personal Injury Protection (PIP) Coverage: A Guide (Updated 2022)

Medical expenses from a car accident can be sky-high. Personal injury protection coverage (PIP) helps pay medical costs for you and your passengers. It also includes some non-medical benefits, such as covering lost wages if you can’t work while recovering, household expenses you might face if you’re laid up (like childcare and housework), and even funeral costs.

PIP is also called “no-fault insurance” because policyholders are entitled to benefits no matter who was responsible for an accident. This coverage is optional in some states but in others, it’s a required part of your auto insurance. Even if PIP isn’t required where you live, you might want to consider investing in this valuable coverage. Compare auto insurance quotes on Insurify.

What is personal injury protection coverage?

PIP insurance kicks in if you and/or your passengers are injured in a motor vehicle accident, no matter who was at fault. It can also help if you’re injured as a pedestrian, cyclist, or passenger in someone else’s car. Personal injury protection insurance is different from bodily injury liability insurance.

PIP covers medical costs for you and your passengers, while bodily injury liability coverage is for medical expenses of people in other vehicles if you’re at fault. Another difference is that PIP also includes essential non-medical benefits, which are explained in the section below.

A key benefit of PIP is the speed of payment. If you’re not at fault for the accident, you might be able to seek payment from the responsible party’s liability insurance, but the claims and potential litigation processes can take ages—leaving you on the hook for your medical expenses in the meantime. With PIP, though, claim payouts are very fast.

Sometimes, PIP has overlapping benefits with your auto insurance’s medical payments coverage (MedPay) or your health insurance. The difference is that PIP is specifically for vehicle-related health expenses and often includes additional benefits beyond these other policies.

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What PIP Covers

PIP insurance covers a multitude of scenarios that might arise if you’re injured in an auto accident. It not only helps with medical bills but also provides some financial security: in the event that you can’t work or, worse, pass away, your PIP can help replace your lost income.

Medical and other expenses after a car wreck could also wreck your finances, so you might want to consider purchasing PIP coverage beyond what’s required or even if it’s not required. Drivers named on the policy and their passengers are covered. PIP will also provide benefits for named drivers if they’re injured as a pedestrian/cyclist or in someone else’s car.

PIP benefits are often limited to three years from the date of the accident. A very important caveat: You must make sure you understand the details of your plan and its coverage limit, or the maximum amount your insurer is obligated to pay out following an accident. Different PIP plans can set different amounts for each of the following benefits.

Medical Bills

PIP coverage pays for medical care like ambulance services, hospital bills, medications, rehabilitation, medical equipment, and prosthetic devices. It may also help pay for your health insurance deductible.

Lost Income

If your injuries mean you can’t work, some PIP plans provide reimbursement of up to 80 percent of your income.

Essential “Substitute” Services

PIP may pay for other expenses you have after a wreck, such as childcare, house cleaning, and yard work. Be sure, though, that you understand the hourly rate your PIP plan is willing to pay for such services.

Funeral Expenses and Accidental Death Benefits

Hopefully, you won’t need these benefits, but in the worst-case scenario, PIP insurance pays for funeral expenses. (Strangely enough, dying isn’t cheap.) PIP may also help protect your surviving family members by replacing some of your lost income.

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What PIP Doesn’t Cover

Your PIP benefits won’t help you pay for the following:

• Medical expenses beyond your PIP policy limit. For example, if you have $20,000 worth of medical bills but your PIP limit is $15,000, you’ll have to pay the remaining $5,000 out of pocket. Again, make sure you understand your plan’s coverage limits.

• Repairs to your vehicle after an accident. You’ll need collision coverage for this.

• Repairs to others’ vehicles or property if you cause an accident. These expenses are only covered by property damage liability insurance.

• Repairs to your vehicle due to weather damage or vandalism, or replacement if it’s stolen. If you want this type of protection, you’ll need comprehensive auto insurance.

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States That Require PIP Coverage

Car insurance requirements depend on each state’s laws. Some states are “no-fault states,” meaning that each motorist is required to file claims with their own insurance, regardless of who caused the accident. These states require drivers to have at least a minimum amount of PIP coverage as part of their automobile insurance.

Some at-fault states also require drivers to have PIP.

The amount of required coverage varies from $2,000 to $30,000, so be sure to check your state’s rules.

States and territories where PIP is required are:

• Delaware

• Florida

• Hawaii

• Kansas

• Massachusetts

• Michigan (unless the driver has Medicaid)

• Minnesota

• New Jersey

• New York

• North Dakota

• Oregon

• Puerto Rico

• Utah

Pennsylvania requires drivers to have at least $5,000 worth of coverage in medical benefits but doesn’t stipulate that it be through PIP; you could instead get this coverage through MedPay benefits.

Even in states that require PIP, if the amount of medical expenses or severity of injury passes a certain threshold (called a tort threshold), you might be entitled to sue another driver for damages. Tort thresholds are also affected if the accident was caused because a driver was under the influence of drugs or alcohol.

In seven states (Arkansas, Kentucky, Maryland, South Dakota, Texas, Virginia, and Washington) and Washington, D.C., car insurance companies are required to offer PIP, but drivers are not required to buy it.

In 30 states, PIP insurance isn’t offered at all. Contrary to what the name suggests, full-coverage car insurance does not include PIP coverage.

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How much PIP coverage should I get?

The answer to this question depends on a few things. Do you have health insurance, and if so, how robust is it? If you don’t have health insurance, you’ll definitely want to invest in PIP so that you don’t get stuck with medical bills that leave you in debt.

If you do have health insurance, think about how much money you would need to cover your deductible, copays, co-insurance, etc. Check if your health plan puts a cap on what it will pay per year or per lifetime; if it’s a low amount, PIP could pay for your medical expenses beyond your insurance company’s cap.

Alternatively, if you’re well covered by your health insurance, you might only need the minimum required PIP. And if you have good health insurance in a state where PIP isn’t required, you might not need it at all.

Also consider what other expenses you could face after a serious car accident, as well as income you and your family could lose if you can’t work or if you die. Will your family need childcare or house cleaning services? In short, consider buying as much PIP insurance as you can afford, especially if you’re not well covered through health insurance.

Compare Car Insurance Quotes with Insurify

No matter what kind of car insurance you’re looking for, one of the best ways to save money is to shop around and compare prices from multiple companies. Getting car insurance quotes never hurts your credit score. Insurify’s auto insurance comparison tool lets you see prices from multiple companies in your area with one simple search.

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