The average American pays just over $1,700 a year on their auto insurance. Like it or not, auto insurance is a fact of owning and driving a car in America. Car insurance does a useful job of making sure that you’re covered for any costs that might be incurred by a car accident that wasn’t your fault.
There is another type of car insurance that will payout and cover you for an accident regardless of whose fault it is. This is known as PIP.
If you’re reading this article and wondering “what is PIP in auto insurance?” then stick with us. By the time you’ve finished this article, you’ll know everything you need to know about Personal Injury Protection.
What is PIP in Auto Insurance?
PIP stands for “personal injury protection” but you may also see it referred to as “no-fault” insurance. It’s a type of cover that provides you with money that you need to pay for any medical bills or rehabilitative costs for yourself and any passengers in your car in the event of an accident. You’re also covered by PIP if you’re hit by a car while you’re a pedestrian or a cyclist.
Personal injury protection is sometimes confused with a different type of insurance known as bodily injury liability. The main difference between personal injury protection and bodily injury liability is that personal injury protection will cover your costs no matter who is at fault for the accident. Bodily injury liability only covers you if you’re not at fault.
PIP insurance will often cover some of the same things as your health insurance or medical payments policy. The main difference between those types of insurance and PIP auto insurance is that personal injury protection is often exclusively part of car insurance policies.
PIP policies are specifically written with car-related accidents and injuries in mind, these things are sometimes excluded from standard medical insurance policies.
What Does PIP Cover?
Personal injury protection coverage is there to help you pay for any treatments or reasonable expenses that relate to your rehabilitation from a motor accident.
The types of things you’ll be covered for will vary by state, but there are some basic things that you can expect to be covered for.
Hospitalization
If your accident is serious enough to land you in hospital, then your PIP coverage should cover the costs of this. This is essential help if you require more than a short stay in the hospital.
Operations
Sometimes, injuries from motor accidents can be severe enough for you to require an operation. Your PIP policy will cover any reasonable expenses incurred by any operation that you need to help you rehabilitate from your injury.
Long-Term Care
The effects of a car accident can be long-term. Once your initial treatment is over, you may still need to attend weeks, months, or years of physical therapy to help you get back to where you were before the accident.
Personal injury protection will be able to cover some or all of the costs incurred by this long-term treatment.
Lost Wages
A lot of jobs require intense physical work. If you’ve had a car accident, your injuries might be severe enough that they prevent you from undertaking the physical aspect of your job.
This, naturally, can lead to worry about losing your wages because of your inability to do your job after an accident. PIP coverage will be able to help lighten the load if you can no longer do your job after an accident.
Funeral Expenses
Car accidents can be serious. Your PIP insurance can offer a death benefit for the policy holder’s family in the unfortunate event that they pass away as the result of a car accident.
Homecare Expenses
Finally, your PIP coverage can also help you pay for any homecare expenses. If your accident has left you incapable of being able to carry out basic household tasks like cleaning and gardening, then your PIP provider can give you a payout to help pay for those things.
Do I Need PIP if I Have Medical Insurance?
The answer to this question depends on where you live. Currently, there are 12 states across the country that legally require you to have some form of PIP insurance. In these states, you have to file a claim through your PIP coverage before you go through your health insurance.
Even if you don’t live in a state that requires you to have PIP, you should still consider getting it. This is because PIP insurance covers you for certain things that your health insurance policy may not cover.
Some states, like New Jersey and Michigan, have hybrid systems that allow you to use your health insurance alongside your PIP insurance. For example, if you’re injured in a car accident, your health insurance would pay for your treatment, and your PIP would pick up any associated expenses like lost wages or housecare bills.
If you’re interested in learning more about PIP or getting some cheap car insurance, then speak to some insurance specialists today.
How to File a PIP Claim
Filing a PIP claim is much like filing any other insurance claim. You can either do it over the phone or online. You should file your claim as soon as possible so that your PIP insurance can pay for your immediate treatment.
Any longer-term, ongoing, or non-urgent claims will need to be handled slightly differently. You’ll need to have your treatment plan reviewed and pre-approved by a medical professional of the insurer’s choosing.
The amount of money that your policy covers will depend on which state you’re in and the plan that you’re on. Somewhere like Florida, for example, your PIP coverage will only cover 80% of your total medical bill.
The most important thing to remember when filing a PIP claim is to closely follow your auto insurer’s procedures and timelines. In certain states, you have to submit your claim within a certain time frame.
PIP by State
As mentioned above, some states legally require you to have some level of PIP coverage. These states are as follows:
- Delaware
- Florida
- Kansas
- Hawaii
- Massachusetts
- Michigan
- Minnesota
- New Jersey
- New York
- North Dakota
- Oregon
- Utah
Personal injury protection coverage can also be purchased from seven other states. These are Arkansas, Kentucky, Maryland, South Dakota, Texas, Virginia, and Washington. Optional coverage is also available in the District of Columbia.
How Much Does PIP Cost?
The price of your PIP will depend on a number of factors. Things like your policy coverage limit and your deductibles, as well as the state you live in, will affect the price of PIP on your plan.
As an example, let’s take a 30-year-old male driving a 2010 car in Florida with $10,000 of PIP coverage. With a $1,000 deductible, you’d be paying $114 for your PIP. With a $500 deductible, you’re looking at $117, a $250 deductible will make the PIP $124, and with a $0 deductible, you’ll be paying around $136.
The percentage of your total auto insurance cost that goes towards PIP will be somewhere between 15% and 17%.
Should I Get Medical Payments Insurance as well as PIP?
This is an interesting question. Both PIP and MedPay insurance is there to help cover the costs of your medical bills following a car accident. That being said, MedPay insurance won’t cover many of the additional expenses that your PIP coverage can pay for. This includes things like lost wages, childcare, funeral costs, childcare costs, or home care bills.
Because of these additional things, MedPay insurance may not be required for you if you live in a state that requires you to have some form of PIP coverage. Take Michigan for example. In that state, insurers are required to offer unlimited PIP coverage, so you wouldn’t need to use MedPay.
On the other hand, if you live in a state with low PIP limits, then a good medical payments policy will help by providing additional coverage to supplement your PIP.
The Bottom Line
Now you’ve got a comprehensive answer to your question of “what is PIP in auto insurance?” It can seem a confusing thing on first inspection, but it’s a helpful tool that can help you in the event of a car accident. Whether or not you should get it depends on where you live and how much you’re willing to pay. If you enjoyed this insurance article, then you should check out some more of our helpful financial content today. Stick around on our site.
