Personal injury protection (PIP) insurance covers certain financial costs related to car accident injuries, without the need to prove fault for the accident or go through the other driver's insurance. These benefits may make PIP insurance an appealing option for you, but it's important to know the specifics.
Personal injury protection (PIP) car insurance covers medical expenses and certain other economic losses stemming from injuries you suffer in a car accident. Two key benefits of PIP are:
PIP insurance always applies to the policyholder. In addition to covering policyholders in their own cars, a PIP policy may also cover injuries they suffer while walking, cycling, or riding in someone else's vehicle.
In addition to the policyholder, and depending on state law and coverage details, PIP may also compensate:
The issue of who is covered under a given PIP policy can be complicated when there are other car insurance coverage options at play (when an injured passenger or household member has their own PIP coverage, for example).
As we mentioned above, PIP is supposed to reimburse people for the money they spend (or lose) as a result of car accident injuries. So, if you're covered by a PIP policy, it will provide compensation for:
PIP coverage is limited in important ways, so it's vital to read your policy (or one you're considering) to understand what accident-related costs might be excluded. Some of the things PIP does not cover include:
You'll need insurance beyond PIP if you want to protect yourself against these kinds of losses. For example, collision coverage can help pay for repairs or a new vehicle after an accident.
PIP's most significant limitation is probably that it does not cover the pain and suffering you might experience because of a crash. We'll talk more below about how to seek compensation for these losses.
With PIP, the focus is on covering policyholders (and their families and passengers) for car accident injuries and related harm. The major difference with liability insurance is that it covers other people's losses when the insured driver (the policyholder) causes an accident.
This goal of protecting other people from accidents caused by the policyholder is why nearly every state requires drivers to carry liability insurance or otherwise be able to demonstrate financial responsibility in case they cause a car accident.
Unlike PIP insurance, liability insurance doesn't cover the policyholder at all. Instead, it applies when the insured driver (or someone who has the owner's permission to drive the insured vehicle) causes an accident and other people suffer:
Despite the differences between PIP and other kinds of auto insurance, the claims process works basically the same way. When seeking compensation after a car accident you'll need to:
Let's look at each of these steps in more detail.
It's always a good idea to inform your insurance company right away if you've been involved in a car accident.
If you have PIP coverage, then the company's representative should be able to explain how to begin the PIP claim process. You may be able to do that over the phone with the representative, or by using the company's website.
Remember that telling your insurance company about the accident is just the first step. When you speak with a representative, you can take the opportunity to make sure you know what documentation you may need to submit to substantiate your losses. This could include:
You should also feel comfortable asking the insurance company about how long they think it will take to process your claim and reimburse you for your losses.
If you've been injured in a car accident and are seeking compensation, you're often dealing with the at-fault driver's insurance company. In that situation it makes sense to be careful about what you say and about what you agree to do, since the other driver's insurance company is focused on reducing or eliminating the amount of financial responsibility attributed to their customer.
With a PIP claim it's different, because you're working through your own insurance to receive compensation promised to you under your contract with the company. You should read your contract and understand its terms, but every auto insurance contract requires the policyholder to cooperate in certain ways with their own car insurance company's claims investigation. That means being truthful about the accident and your injuries, answering questions, and providing requested documentation.
As we'll discuss more below, the total amount of compensation you can receive from PIP coverage will depend on your state's legal requirements and whether you decide to pay a higher premium for additional coverage.
If the financial costs of your car accident are greater than your PIP coverage limit, you may be able to get compensation for the remaining amount either by filing a third-party car insurance claim or by pursuing a personal injury lawsuit against the at-fault driver.
It's important to remember, though, that no-fault car insurance states place restrictions on your ability to sue an at-fault driver (or file a third-party insurance claim with their insurer, if they have liability coverage). Depending on the state, you may be barred from doing so unless you meet:
Even if you meet these requirements for making an insurance claim or filing a lawsuit against the at-fault driver, there's no guarantee you'll get a settlement (or jury verdict) that covers all of your losses. On the other hand, a third-party insurance claim or lawsuit—unlike a PIP claim—allows you to seek compensation for non-economic damages like your "pain and suffering." Non-economic damages can add up to a substantial amount of money if you've been seriously injured in an accident.
If you have health insurance, some states require you to use that coverage together with your PIP coverage, instead of relying just on PIP.
For example, let's say your health insurance plan has a $1,500 deductible (meaning you pay $1,500 out of pocket before your plan kicks in to cover additional costs). If you're in an accident and your medical bills are more than $1,500, you might only be able to use PIP to cover the deductible, with your health insurance then taking over to cover the rest.
If you have both health insurance and PIP coverage, it can sometimes be difficult to figure out how they work together to compensate you for car accident injuries. Make sure you read both policies closely and don't hesitate to contact your insurance companies for an explanation of the details.
Learn more about the role of health insurance in covering car accident injuries.
In some states this decision is made for you—the law where you live may either require or prohibit PIP policies. In particular, PIP is required in states that use no-fault car insurance systems. In these states, you need PIP because you're always required to file a claim with your own insurance carrier after an accident, even when that accident is someone else's fault.
If you have health insurance, you can use it to cover medical care for car accident injuries. But a PIP policy is a good option if:
Like PIP, medical payments coverage ("MedPay" for short) is car insurance that will pay for the medical bills of the policyholder and any passengers if they're injured in an accident.
If you have a choice between PIP and MedPay, then PIP is probably the better option because it offers broader protection. MedPay coverage is limited to medical bills, while PIP (like we've already mentioned) covers other financial costs brought on by your injuries.
Remember, though, that you may not live in a state where PIP coverage is available. In that case, MedPay could make sense as a substitute that offers a similar kind of protection.
The answer here depends on a combination of state law, your circumstances, and your personal preference.
States that require PIP will have a minimum amount of mandated coverage—usually tens of thousands of dollars. Even states that don't mandate PIP may have laws requiring insurance companies to offer a minimum amount of PIP coverage as an add-on to their auto insurance policies.
Legal requirements aside, PIP is like any insurance policy—you'll have to look at the monthly cost of the premiums and weigh that against the financial help the coverage will offer if you need it.
Whether or not it makes sense to work with an attorney after a car accident will depend on the severity of your injuries, the amount of your financial losses, and the complexity of your claim. For example, if your injuries are minor and it looks like you'll be fully compensated through your PIP policy, you may feel comfortable handling your claim yourself.
On the other hand, an attorney may be able to offer valuable help if you run into any problems with the PIP claims process, if the stakes are high because of severe injury or large financial losses, or if you're unsure about how to handle some aspect of your claim.
Consulting with or hiring an attorney may be particularly helpful if a car accident leaves you with medical bills and expenses that exceed the limit of your PIP coverage. As we've discussed, figuring out how to recover losses beyond your PIP coverage can be challenging. An experienced personal injury attorney should be able to explain your options and, if a lawsuit makes sense, handle the time-consuming and complicated work of litigating your case.
Learn more about how to choose a personal injury attorney. When you're ready, you can connect with a lawyer directly from this page for free.