Personal Injury Protection (PIP) or No-Fault Insurance

Personal Injury Protection (PIP) is a type of auto insurance coverage (also called no-fault insurance) available in certain states.  It pays medical expenses, and in some cases, loss of income, essential services, accidental death, funeral expenses, and survivor benefits, regardless of who is at fault in an automobile accident.

Personal injury protection (PIP) is considered a medical benefit, which is added to the mandatory state-required minimum car insurance coverage. PIP goes by a variety of names. It is sometimes called no-fault insurance because most states that operate under no-fault car accident rules require the addition of PIP to their mandatory car insurance.

Some states require PIP, and some states make it an obligation on the part of the consumer to decline PIP in writing on their car insurance application. In its most basic form, PIP is added medical protection that may be a good idea. Freeway Insurance agents can walk you through deciding if PIP is a good choice for you if you don’t live in a state that requires PIP.

The actual cost of PIP is something determined between you and your car insurance provider, which illustrates why comparing different car insurance companies is a good idea.

States that require PIP do so in very different amounts. For example, Minnesota requires $40,000 in PIP coverage, while Utah only requires $3,000 in PIP. Both of these states are no-fault states. Texas, which is an at-fault state, requires motorists to refuse PIP coverage ($2,500) in writing.

See the table below to find out which states require PIP and how much each state requires.

As far as car insurance is concerned, states are referred to as either no-fault or at-fault states in terms of whose insurance kicks in to pay for injuries and damages after a car wreck. In a no-fault state, your insurance covers you and your damages regardless of who caused the accident. In part, the decision to become a no-fault state is a measure to protect drivers against uninsured motorists who cause a wreck.

Contrarily, in an at-fault state, your state-required minimum car insurance will be used for the other driver’s injuries and damages if you caused the wreck. There won’t be any insurance money for your injuries and damages. Likewise, if you are in a wreck that isn’t your fault, the insurance of the person who caused the accident will be used for your injuries and damages – assuming they have insurance.

Regardless of whether you live in an at-fault or no-fault state, you can always choose full coverage car insurance for the maximum protection for you and your assets.

Accidents cost money – and a lot of it in some cases. States want the people involved in those accidents – and their insurance companies – to assume the cost of paying for those injuries and damages. It is the idea behind mandatory car insurance as a whole. When looking at the state-required minimum car insurance – or liability – medical costs can easily exceed the amounts your insurance company is on the hook for and personal injury protection (PIP) or no-fault insurance can pick up some of the slack.

Remember, mandatory car insurance generally consists of an amount for bodily injury or death and an amount for property damage. This is called liability insurance.

In states where PIP is mandatory, it typically kicks in before your bodily injury liability and covers items that your bodily injury benefits do not, such as lost wages, childcare, funeral services and ambulance services.

You certainly can if you think it’s necessary. With today’s rising health care costs, being able to cover your bills after an accident can provide peace of mind. Some things to keep in mind include: