PIP Insurance: What is it and What Does it Cover?

In every state in America, drivers are required to carry auto insurance on their vehicles. Without this protection, it’s illegal to register or drive a car. State minimums may vary, but in almost all cases you’ll be required to carry liability insurance. In some states, another requirement is personal injury protection insurance (PIP).

What is PIP insurance and how does it protect you? Let’s explore what this coverage offers you and whether you need it. 

What is Personal Injury Protection (PIP) Insurance?

If you’re in an accident and carry liability insurance, that’s great. Your liability coverage will pay to cover the medical expenses and property damage expenses of the other party involved, should you be found at fault. 

But what about your own expenses? Your insurance doesn’t cover your lost wages, medical bills, or any other medical financial responsibility you may incur. Unless, that is, you have personal injury protection insurance (PIP). 

So, what is PIP insurance? This coverage assists you financially if you’re involved in an accident, no matter who is at fault. Payouts from your personal injury protection insurance can be used to pay expenses such as hospital bills, home care bills, funeral expenses, medical test costs, and even wages lost as a direct result of your injuries. 

What Does Personal Injury Protection Cover?

As noted, PIP coverage will assist you and your passengers financially should you become injured in an auto accident. The coverage you receive may vary with your provider, but your PIP insurance will generally cover:

  • The cost of necessary operations
  • Emergency transport
  • Bills associated with the hospitalization of you or your passengers
  • Death benefits, funeral and burial expenses
  • Home medical care services
  • Some other necessary services such as childcare or housekeeping

The coverage extends to every person riding in the vehicle with you at the time of your accident, and coverage is paid whether you were found to be at fault or not. 

Do I Need PIP Coverage if I Have Health Insurance?

If you live in a state that requires personal injury protection coverage, the short answer is yes. You will not be able to register your vehicle legally until you can show proof of this coverage. 

States that require PIP coverage are:

  • Delaware
  • Florida
  • Hawaii
  • Kansas
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Oregon
  • South Dakota
  • Texas
  • Utah

In all other states, PIP coverage is optional. 

If you live in a state where PIP coverage is optional, accepting or declining PIP is up to you. However, please note that some health insurance companies specifically decline coverage for injuries sustained in auto accidents. 

Look over your insurance policy and determine whether you’ll be covered for auto injuries. If not, PIP is a great idea; you can have peace of mind that you’ll be financially “okay” should you experience an accident. 

Even if you have excellent health insurance, PIP will help to further alleviate your financial responsibilities. For instance, you will likely not be responsible for copays or deductibles for your hospital stay or other services. Furthermore, you will not face network restrictions with your PIP coverage as you will with your health insurance. 

In summary, you probably do not need PIP coverage if you have health insurance. However, this protection offers you coverage that your health insurance does not. 

How Much PIP Coverage Do I Need? 

If personal injury protection insurance is required in your state, you will obviously have to purchase the minimum amount of coverage at the very least. 

If you’ve decided that PIP is a great option for you, you’re probably wondering how much coverage you should purchase. A good rule of thumb is to begin with at least $10,000 in coverage. This will at least give you a head start on medical bills and lost wages. 

Then, consider your assets. You’ll want to ensure you have enough insurance to cover the loss of your vehicle. (Remember, insurance companies in at-fault states won’t pay if you’re found to be at fault.) Take lost wages into consideration, and plan for approximately a month out of work. Finally, decide whether you’d like additional coverage to assist with funeral expenses and other costs. 

Summary: PIP Insurance, Medical Expenses, and More

If you’re involved in an auto accident and found to be at fault, your insurance will cover the medical expenses of the other involved party. What is personal injury protection (PIP) insurance? It is a coverage that can give you an assurance that the medical expenses of you and your passengers will be paid.