What is Personal Insurance Protection (PIP)

Personal Insurance Protection, widely referred to as PIP, offers additional coverage on your car insurance policy. It helps pay expenses incurred for injuries related to a covered motor vehicle accident. The use of PIP insurance is part of the no-fault car insurance system adopted by several states and Washington, D.C. If you are in a vehicular accident where you are not at fault, this no-fault system limits your right to sue the driver who has caused the wreck. Instead, your PIP coverage will handle your own costs and expenses. Advocates argue that this system allows quicker and less complicated claim settlements. Another touted benefit is lower insurance premiums due to the reduction of court costs and legal fees.

What does PIP cover?

This insurance protection is meant to cover a percentage of your medical expenses resulting from an automobile accident, and may cover some related costs that your health insurance doesn’t. Depending upon your policy limits, your PIP insurance will generally pay for up to about 80-85% of your covered expenses. PIP will vary from state to state, so look closely at the law in your jurisdiction to determine what you can expect in your state.

Examples of some common expenses covered by various PIP policies:

  • Medical bills
  • Emergency Vehicle bills
  • Hospital bills
  • Rehabilitation Expenses
  • Lost Income/Wages
  • Funeral Costs
  • Survivor Benefits
  • Loss of services or “substitute services” resulting from your inability to continue performing your normal household duties
  • Child care expenses incurred when your injury impedes your role as primary caregiver

As a policy holder, you and the passengers of your car may be covered. Additionally, you may be covered if you are injured as a pedestrian or while riding in someone else’s vehicle.
Is PIP coverage mandatory?

Currently, this extended insurance coverage is legally required in the District of Columbia and 12 states, including New York and New Jersey. In other states, such as Colorado and Washington, you must sign a waiver to refuse “mandatory” PIP coverage when you originally purchase your car insurance policy. The remaining states offer PIP coverage on an optional basis. They have chosen not to adopt the “no-fault” system, thereby allowing a driver to sue for their resulting car accident medical damages and related costs when another motorist is at fault.

Is PIP Expensive?

Again, because this coverage is handled differently throughout the states, expenses too will vary. However, as a rule, PIP insurance will typically be in the mid-range of your vehicle insurance premium costs. It usually averages between $5 and $20 each month.

A good factor to consider when deciding on PIP in an optional state or on increasing the minimum coverage limits in a mandatory state, is the extent of coverage you have through your health insurance. The better your health care coverage, the less you need extensive PIP coverage.

What if my PIP isn’t enough to cover all my expenses in my No-Fault State?

If you live in a no-fault state and you have additional expenses after your PIP has reached its financial limit, you may have other options.

  • If you have uninsured motorist coverage/underinsured motorist coverage (UM), this will kick in if the other driver at fault has either no insurance or insufficient coverage.
  • You may be able to obtain a settlement from the other driver’s insurance company for the remaining unpaid expenses and pain and suffering.
  • If you have personal medical health insurance, this will take over where your PIP leaves off.

When considering PIP insurance, check with you state laws to determine whether or not it’s mandatory. If you are allowed to waive your PIP coverage, make sure you are not leaving yourself vulnerable. And finally, look at your other coverage in this area to determine the best amount, if any, of PIP coverage you require. If you’ve been in an accident you can contact a NJ Accident Lawyer for guidance.

About Aimee Lancaster

Born and raised in New York Aimee works as a freelance author and contributes to multiple publications and blogs around the world.