Personal Injury Protection, or PIP, is auto insurance that covers medical payments resulting from an accident. PIP Insurance is also known as “no-fault” coverage because of how the statutes protecting it are drawn up.
What does no-fault coverage mean?
PIP insurance is all about paying for damages or injuries the policy holder has sustained, regardless of fault. At the moment, there are twelve states (in addition to Washington D.C. and Puerto Rico) where Personal Injury Protection insurance is required, according to the Insurance Information Institute (III). These states include: Florida, Michigan, New Jersey, New York, Pennsylvania along with Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota and Utah. In other states, PIP can be taken on as optional coverage in your policy.
So how do you benefit from having Personal Protection insurance? The advantage of personal injury protection is that it provides the policyholder—that’s you—as well as your passengers with medical coverage even if any one of you don’t have health insurance. If medical bills go beyond the limits stated in your policy, then that’s when health insurance may step in. You can look at it this way: if you think your health coverage isn’t all that much, adding Personal Injury Protection coverage can take your coverage from “barely enough” to something you can feel secure with.
Beside easing worries and stress after an accident, you may still be asking the question of: What does PIP insurance cover? According to CoverHound, PIP insurance coverage typically includes:
- Your medical expenses. As mentioned above, in case you’re hurt or require medical attention, the costs are shouldered by your insurance carrier up to the policy’s limits. So you won’t have to lose sleep over hospital and doctor bills, prescriptions and in-home medical assistance or even rehabilitation fees.
- Lost wages. If you’re at the hospital or in bed and can’t report to work, or are injured and unable to render services, this coverage shoulders the wages you lost during the period where you can’t find work.
- Funeral costs. In case the accident turns into a fatal one, Personal Injury Protection insurance covers funeral expenses to help ease the financial burden on the policyholder’s family as well as on the family of the policyholder’s passengers.
- Other Costs. From things like transportation to medical appointments, to lawn care and other home maintenance – PIP can take care of them.
Should I go for the minimum required by state laws?
Policyholders with a full understanding of what PIP coverage entails typically pay for more than the minimum required by the state. If you want to make sure you’re protected each day you pull out of your garage and head out on the roadways, you might want to consider upping your PIP coverage.
How is PIP coverage different from medical payments coverage?
Personal Injury Protection insurance offers more in terms of coverage, compared to medical payments coverage. The latter focuses on paying for your medical costs and those of your passengers if you ever find yourself involved in an auto accident in any form, regardless of who’s to blame. That means you’re covered even if you aren’t actually behind the wheel or even a passenger in somebody else’s car. You could be just crossing the street along with a swarm of tourists from Topeka and somehow end up getting hit by a car. Any and all medical costs are covered when you’ve got medical payment coverage. However, unlike PIP coverage, you won’t be covered for any other expenses like lost wages, funeral costs, rehabilitation services and childcare services.
Which coverage is better for injuries?
This depends on what you need. If you want a more comprehensive coverage, PIP is obviously the better choice over medical payments coverage. However, if you live in a state where PIP insurance is optional and you want to save up on costs, you could go for medical payments coverage instead.
The more insight you have into PIP coverage, the more financial sense your decisions will be when it comes to choosing a coverage. Use this information as a spring board to consult your specific state’s laws more closely.