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What Is Personal Injury Protection Car Insurance?

Christy Bieber
Robin Hartill, CFP
By: Christy Bieber and Robin Hartill, CFP

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Ashley Maready
Check IconFact Checked Ashley Maready
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When you buy auto insurance, you may need to purchase personal injury protection. Personal injury protection, or PIP, pays for a policyholder's medical bills and partial lost wages after an accident. Keep reading to learn more about what personal injury protection insurance is and how it works.

What is personal injury protection (PIP) and what does it cover?

Personal injury protection insurance is a type of auto insurance required in no-fault states. In no-fault states, you can't sue an at-fault driver unless your damages exceed a certain threshold. However, a handful of at-fault states have mandatory or optional PIP coverage.

PIP covers injuries and certain losses after a car accident. If you have PIP insurance, it will cover you and your passengers no matter who was at fault for the accident. It covers only specific types of losses, though. They include the following.

Medical bills

Personal injury protection provides coverage for reasonable medical expenses incurred by the policyholder. It may cover a specific percentage of medical expenses, such as 80% of costs up to the policy's limit. It can also cover medical expenses incurred by passengers, as well as members of the policyholder's household who were driving the car.

Lost wages

Personal injury protection car insurance covers lost wages. If a policyholder must miss work due to an accident or injuries, personal injury protection will pay partial lost wages. The specific percentage of lost wages varies by state.

Funeral expenses

PIP can pay for funeral expenses of victims killed in an accident. These expenses will be covered for the policyholder and passengers in the policyholder's vehicle at the time of the accident

Survivor's loss

Some PIP policies provide dependents of deceased accident victims with money to cover part of the deceased person's lost wages.

Essential services

In some cases, PIP policies pay for services a person needs due to the injury. This could include housekeeping or child care.

What is not covered by PIP?

PIP does not cover:

  • Property damage
  • Injury caused to other drivers in a car accident
  • Injuries from accidents that occur while fleeing police

How does personal injury protection work with other types of car insurance?

When buying insurance, motorists want to make sure they get the right protection without spending extra money to double up on redundant coverage. As a result, it's helpful to understand how PIP insurance works with other kinds of insurance coverage.

Personal injury protection (PIP) vs. no-fault insurance

No-fault insurance is another name for personal injury protection. PIP coverage is required in no-fault states. A no-fault state is one where drivers involved in minor accidents don't collect compensation for losses from the driver who caused the crash. Instead, each driver's own insurer pays for medical bills and partial lost wages regardless of blame.

Personal injury protection (PIP) vs. medical payments coverage

Medical payments coverage pays for reasonable and necessary medical expenses after an accident. It covers them regardless of who is to blame.

However, in at-fault states, drivers who are responsible for a crash are required to pay for medical bills. A policyholder could get bills covered by their medical payments insurance. But their insurer could make a claim against the at-fault driver to get paid back by that driver's insurer.

PIP coverage provides payment for medical bills too. But insurers don't have the option to try to recover the money from the at-fault driver. PIP also provides broader coverage than medical payments coverage. It can pay for lost wages, for example.

PIP is usually more expensive than medical payments coverage. That's because with personal injury protection coverage, the insurer is always on the hook for medical bills. There's no chance to recover the money from the at-fault driver. An insurer offering PIP may have to pay more money after an injury because lost wages are also covered.

Personal injury protection (PIP) vs. bodily injury insurance

Bodily injury insurance pays for damages a policyholder causes to someone else if the policyholder is at fault for an accident. Auto insurance personal injury protection works differently. It pays the policyholder's medical bills and lost wages after an accident. It provides this coverage no matter who was at fault for the crash.

Do I need personal injury protection?

It can be complicated to answer the question, "do I need personal injury protection?" In 12 states, PIP coverage is required. Drivers who live in states where it is optional can decide if they want to sue another driver to collect compensation after an at-fault accident or would prefer to have PIP coverage.

Do I need PIP if I have health insurance?

Drivers may need personal injury protection insurance even if they have health insurance. Their state may require it. And PIP can also provide broader coverage than health insurance. It will pay medical bills before a health insurance deductible has been met, though you may have to pay a PIP deductible. It will also cover lost wages.

If PIP is optional in your state, you may want to purchase it if you don't have great health insurance or your deductible is high. Also, PIP is worth considering if you don't have enough in your emergency fund to cover expenses if you had to miss work due to an accident.

Which states require personal injury protection?

PIP coverage is required in the following states:

  • Delaware
  • Florida
  • Hawaii
  • Kansas
  • Massachusetts
  • Michigan (Except for drivers covered by Medicare)
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Oregon
  • Utah

Medical pay is required in these states:

  • Maine
  • Pennsylvania

Personal injury protection coverage is optional in these states:

  • Arkansas
  • Kentucky
  • Maryland
  • South Dakota
  • Texas
  • Virginia
  • Washington
  • Washington, D.C.

How much does PIP car insurance cost?

The typical cost of car insurance can vary depending on many factors. For PIP coverage, the biggest determining factor in price is where a policyholder lives. According to insurance comparison website The Zebra, PIP could add anywhere from $54 to $428 to the annual premium of a 30-year-old male who has no history of accidents, good credit, and drives a 2016 Honda Civic.

Some states require much broader PIP coverage. In those states, premiums will be higher. Policyholders should shop around with the best auto insurance and get several quotes to get an idea what a personal injury protection policy will cost.

How do you file a PIP claim?

The process of filing a personal injury protection claim varies by state and insurer. Generally, policyholders need to quickly alert their insurer to an accident. They may have a limited number of days to report the claim, see a doctor, and get diagnosed with injuries. Policyholders may also need to receive care from specific medical providers.

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  • Bodily injury liability coverage pays for damage a policyholder causes someone else. Personal injury protection pays for medical bills and lost wages a policyholder personally incurs. PIP coverage pays medical bills and lost wages for the policyholder, members of their household, and their passengers, no matter who was at fault in an accident.

  • Personal injury protection does not cover pain and suffering. It pays for medical bills, partial lost wages, and funeral expenses.

  • Using PIP coverage should generally not result in an increase in insurance premiums. In most cases, insurance premiums go up only when the policyholder is considered at fault for an accident.

  • The specifics of who gets a check for medical bills after an accident can vary depending on the type of auto insurance coverage and how damages are paid for.

    In many cases, insurers provide a check directly to the provider. In other situations, insurers provide a check to the accident victim. However, the victim is required to use the money to pay the healthcare provider. Or the victim may need to use the funds to repay a health insurer that covered accident-related costs.

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