What is PIP Insurance?

If you live and drive in the United States, you need to know how the state you live in impacts your auto insurance.

Whether you live in an “at-fault” or “no-fault state,” it will affect your vehicle coverage and if you can have PIP.

A driver who causes a car accident in an “at-fault” state is liable to pay for medical and property damage.

But these costs can add up and are something you do not want to deal with after the trauma of a car accident.

A motorist who causes an auto accident in a “no-fault” state is not liable. In fact, they will hold no one person or driver responsible for the crash.

At-fault states cover expenses, including any medical bills and medical treatment costs that you or any injured passengers may receive.

PIP or personal injury protection is also “no-fault” insurance. It is a car insurance policy add-on that some drivers can use.

It is not the same as bodily injury liability, health insurance, or liability insurance.

If you want to make sure you have coverage, find out if you qualify for PIP and whether you can add it to your auto insurance policy.

What Does Personal Injury Protection (PIP) mean?

If you qualify for PIP, you must already have it added to your auto policy before a vehicle collision occurs.

Your eligibility for PIP, again, depends on where you live in the U.S.

If you live in a no-fault state, the law requires drivers to buy personal injury protection (PIP), which is no-fault insurance.

Drivers must also file an insurance PIP claim with their auto insurance company after an accident. Since in a “no-fault” state it does not matter who caused the accident, both drivers must file a claim with their insurance company.

If you live in an "at-fault" state, your insurance company will ask if you want personal injury protection added to your motorist coverage policy, as it requires them to do this by law.

If you are unsure about whether PIP is something you should add, first consider that only twelve out of the fifty states are "no-fault."

Twelve states and Puerto Rico have no-fault auto insurance laws.

1. Florida
2. Michigan
3. New Jersey
4. New York
5. Pennsylvania

Seven out of the twelve states use a monetary threshold:

1. Hawaii
2. Kansas
3. Kentucky
4. Massachusetts
5. Minnesota
6. North Dakota
7. Utah

Three out of the twelve are "choice" no-fault insurance coverage sates:

The three states that have no-fault laws are New Jersey, Pennsylvania, and Kentucky.

If you live in any of the three states, it means that policyholders have a choice between selecting traditional or no-fault recovery insurance.

When you get a new auto policy or if you change your mind about having PIP, you can switch your decision from traditional insurance to a no-fault one and vice versa. However, a new policy will need to be made to reflect these changes.

Make sure you check with your insurance company to ensure your policy aligns with the laws of your state.

Often you can receive a free consultation with an insurance agent to learn all about the options you have and if you want PIP added.

Contact your insurance company to find out what policies and/or add-ons are right for you.

What Is PIP Coverage?

What PIP covers also depends on your state. There are no direct rules that apply across the board to all fifty states.

Thus, every state has its own insurance requirements and restrictions. What PIP insurance covers can also change depending on the state.

If you live in a “choice” state that lets you opt-out of PIP coverage, sign a waiver to decline it. Otherwise, some of you may already have PIP on your policy and not be aware of it.

But remember, the opt-out option is not available in all states, which is why you must talk to an insurance agent about personal injury protection coverage.

If you do not have PIP coverage or reject it, you are putting yourself and passengers at risk.

In the event of a car accident, you may end up having to cover all expenses, like medical bills, for every person suffering from injuries.

But if you also have injuries and cannot go to work, you lose money. Loss of wages can leave you without enough money to cover all costs.

If this happens, victims can sue you for expenses not covered, which may cause you to lose all assets, including your house.

Before signing on to the dotted line to decline PIP, reconsider your options.

Those eligible for PIP usually get coverage for a fixed amount of time: One year. Two years. Three years.

You can get personal injury protection insurance, whether you are working or studying, no matter your income.

If you are in a car accident and have PIP coverage, it may give you 80% of medical payments coverage. (minus any deductible you choose)

It may also pay for 60% of any wage loss too. In some states, they might have a minimum amount of coverage limits.

Most PIP policies have an average PIP limit on the amount of coverage one individual can have. On average, the dollar amount is only $10,000.00.

If you buy PIP coverage, you can take it with you even if you no longer have the vehicle.

Thus, if a driver or passenger no longer owns their car and becomes injured in someone else's vehicle, the insurance of the vehicle owner would provide benefits for the person who does not own the vehicle.

To be sure you get what you want from PIP, discuss the specifics with your personal auto insurance company about your state’s coverage.

It entitles you to get a top-up (called a premium) for the following PIP benefits:

• Housing Benefits.
• Job Seeker's Allowance.
• Income Support.
• Working Tax Credit.
• Employment and Support Allowance - but only if you get the PIP daily living component.
• Pension Credit - but only if you get the PIP daily living component.

Depending on your state, you may receive these benefits from personal injury protection. They can include:

• All reasonable medical expenses. (any necessary surgeries, x-rays, dental, or eye treatments. Any medical procedures, prosthetic devices, or professional nursing.)
• Ambulance services
• Rehabilitation therapies.
• Funeral expenses.
• Lost income because of the accident.
• Replacement of necessary services provided by the injured party, family care or household maintenance. If the injured are not income producers.

Conclusion

There are many benefits personal injury protection offers when added to your insurance. But if you choose not to have it, the consequences could be severe.

If they find you to be at-fault for a car accident and do not have PIP coverage, you are leaving yourself open to a lawsuit. You could lose everything.

Protect your valuables, passengers, and yourself consider adding PIP to your insurance policy.

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