Personal Injury Protection (PIP), When you or your passengers are injured in a car accident, personal injury protection (PIP) insurance pays for your medical bills and lost wages. In most states, PIP is optional. However, 16 states require a certain amount of PIP coverage. PIP insurance may overlap with your health or MedPay insurance, but it is sometimes necessary to have multiple policies.
What exactly is Personal Injury Protection (PIP)?
Personal injury protection, also known as “no-fault insurance,” pays your medical bills and rehabilitative costs if you are injured in a car accident. PIP also applies if you are a passenger in someone else’s car or if you are hit by a car while walking or cycling.
PIP insurance differs from bodily injury liability insurance in that, while PIP coverage pays for your own expenses, liability insurance pays for the medical expenses of other drivers and passengers when you are at fault for an accident.
PIP insurance may provide some of the same benefits as health insurance or a Medical Payments policy.
PIP coverage, on the other hand, is written specifically for car-related injuries, which are sometimes excluded from health insurance policies, and PIP insurance covers a number of additional expenses not covered by MedPay insurance.
What Is Personal Injury Protection?
PIP insurance pays for necessary medical procedures as well as reasonable rehabilitation costs while you recover from an accident. The expenses that are covered vary by state and may include:
- Professional care that is ongoing
- Wages lost if you are unable to work
- Accidental death benefits and funeral expenses
Some home care costs, such as childcare or house cleaning, if you are unable to perform these responsibilities yourself.
Is PIP Required If You Have Health Insurance?
If you live in one of the 16 states that require PIP coverage, you must file a claim under that policy before turning to your health insurance. Even if it isn’t required in your state, PIP insurance provides several benefits that a health insurance policy does not, such as coverage for lost wages and funeral expenses.
In a few states, such as New Jersey and Michigan, your PIP coverage will work in tandem with your health insurance policy. For example, if you are injured in a car accident in Michigan, your health insurance policy may cover your physical injuries, while your PIP policy would cover any additional economic losses, such as lost wages.
How Do You File a Personal Injury Protection (PIP) Claim?
You file a claim just like any other type of insurance, either online or by phone. PIP will assist in paying for medical expenses incurred immediately following the accident. However, for ongoing, non-urgent claims, you must review or pre-approve your treatment plan with a medical expert chosen by your insurer or an outsourced medical claims processor.
Your car insurance company may also approve partial reimbursements or have you examined by a medical provider of their choosing. The amount your policy covers will differ depending on your plan and state. In Florida, for example, PIP coverage will only cover 80% of your medical expenses.
It is critical to adhere to the process and timeline established by your auto insurance company. In New Jersey, for example, any medical care or treatment provided within the first ten days following an accident must be approved and certified by your insurer. Failure to provide the required “Attending Provider Treatment Plan” and its documentation can result in a 50 percent co-payment penalty, regardless of whether the procedure or diagnostic test was medically necessary or reasonably required.
To be considered for payment in New York, all medical bills must be submitted within 45 days of treatment; otherwise, written explanations must be provided. Inquire with your insurance agent about the PIP claim process and keep a copy on hand in case you are injured.
What is the relationship between PIP and other types of car insurance?
If you are injured by another driver and have personal injury protection as part of your auto insurance policy, you should usually exhaust your PIP coverage before considering other options. If your medical expenses exceed the limits of your policy, you can file a claim under the other driver’s liability insurance policy. However, if you are seriously and permanently injured, or if your medical bills exceed your state’s tort threshold, you may choose to forego PIP coverage and sue the other driver.
State Minimum PIP Requirements
PIP insurance is also known as “no-fault insurance” because a certain amount of PIP coverage is required if you live in a no-fault state. Unless a certain threshold is met, your own insurance policy will cover your expenses in these states, even if another driver caused the accident. Depending on your state, these “tort thresholds” can be either monetary or verbal.
Medical expenses for an individual or accident must exceed a state-specified amount before you can sue another driver. Verbal thresholds specify the type of injury that must be sustained before filing a lawsuit.
Although state laws vary, verbal thresholds typically require an individual to have suffered significant and permanent loss of a bodily function, injury or disfigurement, or death. Other factors, such as whether or not the driver was under the influence of drugs or alcohol, can also influence how tort thresholds are applied.
PIP coverage is required in four fault-based states in addition to the 12 no-fault states. In some states, it is available as an optional benefit. The following are the PIP insurance requirements for the states where it is available:
|State||Minimum PIP Requirement||No-Fault State?||Tort threshold|
|Michigan||$250,000 or opt-out||Yes||$3,000|
|Minnesota||$20,000 for medical expenses, $20,000 for non-medical expenses||Yes||$4,000|
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*No-fault states include Kentucky, New Jersey, and the District of Columbia. Policyholders can choose between a no-fault system and a tort liability system, which allows them to file a lawsuit right away.
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How Much Is No-Fault Insurance?
The total cost of PIP insurance will vary depending on the coverage limit and deductible of your policy, as well as the state you live in.
For example, we discovered the cheapest Geico car insurance quotes for a 30-year-old male driving a 2010 Toyota Camry in Florida. A six-month policy with $25,000/$50,000/$25,000 of liability insurance, $10,000 of PIP coverage, and comprehensive and collision coverage with $500 deductibles is included in the total price.
Should I purchase Medical Payments Insurance in addition to PIP?
Both PIP and MedPay insurance are intended to cover medical expenses incurred as a result of a car accident. MedPay, on the other hand, does not cover many of the additional expenses that PIP does, such as lost wages, rehabilitation services, or childcare.
As a result, if you live in a state where PIP coverage is available, MedPay may be unnecessary. In Michigan, for example, insurers are required to provide unlimited PIP coverage, so additional MedPay coverage would be redundant.
A medical payments policy, on the other hand, may provide supplemental coverage if your state has a low limit on how much PIP insurance it requires. Three such states are Florida, Kansas, and Massachusetts. Consider adding MedPay insurance to your policy if you live in one of these states.
To determine the average cost of personal injury protection, we gathered statewide average rates from three major insurers in Florida — Allstate, Geico, and Progressive — where personal injury protection is required by law. We also gathered medical payments coverage rates in Florida, Kansas, and Massachusetts.
The insurance rate data used in ValuePenguin’s analysis came from Quadrant Information Services. These rates were obtained publicly from insurer filings and should only be used for comparison purposes; your own quotes may differ.