Personal injury protection insurance: Everything you need to know  

What does personal injury protection insurance cover? 

PIP insurance coverage helps pay for medical-related costs after an accident, including medical bills, lost wages, essential services you can't do yourself while recovering and a death benefit; it also covers passenger injuries.

Costs usually covered by PIP include:

• Medical expenses such as doctor visits, rehab, medical devices and prescriptions
• Lost wages from not being able to work due to your injuries
• Essential services like childcare, housekeeping and yardwork you need help with while you are recovering
• A death benefit for fatal accidents
• Passenger injuries 

PIP isn’t intended to replace health insurance but to complement it and help pay for accident-related costs. It is often limited to 80% of expenses and has a top limit that may be as low as $10,000.

“Typically, PIP coverage will handle 80% of an injured party’s medical expenses up to a maximum of $10,000 in certain situations,” says Shiloh Elliot, press secretary for the Florida Office of Insurance Regulation.

Is personal injury protection insurance required in your state? 

Personal injury protectionPersonal injury protection (PIP) pays for your medical, hospital and funeral expenses resulting from a car accident, regardless of who's at fault. is required in 14 states: Delaware, Florida, Hawai'i, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon. Pennsylvania and Utah, most of which have no-fault insuranceAn auto insurance system where medical expenses are covered by your insurer regardless of fault. Personal injury protection (PIP) and medical payments (MedPay) are no-fault insurance coverages. laws, and is optional in several others.

In states like Florida, no-fault laws require PIP to pay medical bills regardless of fault, and are intended to speed up the process.

“Florida’s Personal Injury Protection (PIP) coverage is mandatory for all insured drivers and is part of the state’s no-fault car insurance system, designed to make sure people injured in car accidents can get medical care quickly, regardless of which party caused the accident,” says Elliot.

Take a look at the table below to see if your state requires PIP and the minimum limits.

*Choice no-fault states allow you to choose either no-fault or tort coverage. If you choose no-fault, PIP is required.

**Michigan law allows some Medicaid enrollees to carry $50,000 in PIP coverage.

Regardless of whether your state requires PIP, carrying the coverage can ease the financial burden after an accident by paying for costs, like lost wages, that your health care doesn’t.

How personal injury protection differs from other coverages 

PIP pays only for injury-related costs for you and your passengers, while liability insuranceLiability insurance covers sums that an insured becomes legally obligated to pay because of bodily injuries or property damage, or financial losses caused to other people. covers injuries to others. It coverts things MedPay doesn't, such as lost wages, and has lower limits than health insurance. Let’s break down how PIP compares to other types of insurance.

• PIP vs. liability insurance: Liability insurance only covers injuries to others when you are at fault in an accident. It provides no coverage for you. PIP, on the other hand, provides coverage for you regardless of fault and doesn’t cover the other driver, whose injuries are covered by their own PIP coverage.
• PIP vs. MedPay: Medical payment (MedPay) is another type of insurance that helps pay for medical costs to you regardless of fault in an accident. However, MedPay is limited to medical expenses, while PIP pays for related costs, like lost wages or childcare. 
• PIP vs. health insurance: Health insurance covers medical costs and typically has much higher coverage limits than PIP. However, PIP covers expenses that health insurance doesn’t, like childcare and other services. Your health insurance covers any medical needs, while PIP applies only to accidents.

Since most drivers already have liability and health insurance, adding PIP offers an affordable way to add a layer of protection to cover expenses not included with other coverages. 

Choosing PIP coverage: Are state minimum limits enough? 

State-mandated PIP insurance limits are typically low. You should consider the deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim. and coinsurance amounts on your health insurance plan, as well as other costs you would incur if you couldn't work or take care of household chores after an injury. If you don't have health insurance, increasing your PIP provides coverage for medical bills.

Here's how to decide how much coverage you need.

1. First, if your state requires PIP, you must meet the minimum. Consider that a starting point and, from there, consider other factors.
2. Consider what health insurance doesn't cover. PIP covers costs your health insurance doesn’t, such as lost wages. PIP coverage kicks in before health insurance, which can provide financial assistance if you have a significant insurance deductible.
3. If you don’t have health insurance, PIP can ease the financial burden if you’re injured. It also has a death benefit that can be helpful if you don’t have life insurance.
4. Look at the costs that other forms of insurance don’t, like lost wages, childcare, lawn care and other services. How much would it cost to have to pay someone to do those things?
5. Consider how much coverage you may need if an injury sidelines you for a significant amount of time. How long would you need the PIP coverage to last?

Since PIP is relatively affordable, increasing your limits after thinking through these factors is always a wise choice.

How much does personal injury protection insurance cost? 

The average cost of PIP is $191 a year. However, as with other forms of coverage, PIP insurance costs vary by driver, state, and insurer. 

Factors used to calculate rates include your age, vehicle, driving record, and location. States with required coverage may see a higher-than-average PIP premium. 

PIP cost is generally rolled into your state minimum policy, which includes other coverages; as a general rule, you can't buy PIP as a standalone policy.

How to file a PIP insurance claim after an accident 

To file a PIP claim, contact your insurance company to report the accident and injuries. Provide documentation of all related expenses as well as the police report. Meet all deadlines and follow the adjuster's instructions.

Steps of the PIP claim process typically include:

• Contact your insurance company. Inform your insurer of the accident and the extent of your injuries. There will be a specific claims process to follow.
• Acquire documentation. For PIP coverage to kick in, you must provide certain documents, such as pictures, police reports, medical bills and proof of lost wages.
• Follow the process. Your insurer will have deadlines and a specific process to follow. Be honest and punctual with your insurance company to have your claim resolved quickly.

Final thoughts: Who needs personal injury protection? 

Adding PIP to your insurance policy is a good idea, regardless of whether your state requires the coverage. PIP works with your health insurance and offers extra financial protection if you’re injured. Drivers with exceptional health insurance or who won’t be financially burdened by an accident may consider skipping PIP.

“Florida’s PIP law was enacted in 1971 and was created to avoid long legal battles over who caused an accident. Instead, your own insurance company helps you first, which can speed up medical care and payments,” Shiloh says.

Reviewing and updating your auto insurance policy regularly is essential since your coverage needs change. Consider adding or increasing PIP insurance to ease the cost of injury.

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