Personal injury protection (PIP) is a type of auto insurance you buy that will pay out if you're injured in a car accident, no matter who was at fault. PIP is required in 12 states. These are often called no-fault insurance states. In other states PIP is optional or not available.
When you're buying auto insurance, it's important to understand what PIP covers if it's available in your state. Here are the details.
Who does PIP cover?
Personal injury protection covers you and your family members who are injured in a car accident. Your PIP insurance will also generally cover any other person who's injured while in your car as a guest or passenger, or who was using your car with your permission.
In some states PIP will pay for injuries to others if you strike someone who's on a bike or tricycle, on horseback, or in a vehicle being drawn by horses or other draft animals. PIP may also cover you if you're hit by a car while getting in or out of a vehicle that does not have PIP coverage.
What will PIP pay for?
PIP pays for medical expenses such as:
- Surgery, X-rays, dental services, prosthetic devices, ambulance, hospital and professional nursing services. There may be a time limit on how long these expenses will be covered, such as two or three years.
- Funeral, burial or cremation services.
- Possibly a survivor's benefit, sort of like a small life insurance benefit.
PIP pays for lost wages, sometimes called "income continuation." It will pay a certain percent of your gross wages for a defined time period. Check your policy for these specifics. For example, it might pay 85% of your gross income for three years from the date of the accident. If you don't have a job that produces income at the time of the accident, there's no payment for lost wages.
PIP pays for essential services. If you can't do some of your daily family or household tasks because of accident injuries, PIP can help pay for you to hire services such as house cleaning and child care. There is often a daily reimbursement limit, such as $25. Also, this coverage generally does not reimburse family members who perform the essential services for you.
What car accidents are not covered by PIP?
Not all accident are eligible for PIP payments. PIP usually doesn't cover people who:
- Intentionally caused a car accident.
- Were driving or riding in a car they knew was stolen.
- Were committing a felony or trying to flee a police officer.
- Were driving under the influence of drugs or alcohol.
- Were on a ride-sharing trip, such as in an Uber.
- Were using the vehicle as a residence.
What states require personal injury protection insurance?
|State||Minimum required PIP coverage|
|Michigan||Michigan auto insurance policies have unlimited PIP medical benefits|
|Source: American Property Casualty Insurers Association and state insurance departments|
Renting out your car? PIP may be void
You may find that your auto insurance policy has exclusions for PIP coverage. For example, PIP coverage may be void if you're leasing or renting out your car to someone -- such as renting it out through a peer-to-peer car-sharing service such as Maven or Turo.
How long do I have to make a PIP claim?
Ideally you should start a PIP claim as soon as possible after the accident. Your policy will state the final deadline though, such as two years from the date of the accident.
Can I lower my PIP cost?
In some states you may be able to reduce PIP coverage in order to save money. For example, in Florida you can elect to have a PIP deductible and to exclude coverage for lost wages. These options will lower your cost. (A deductible is the amount deducted from your insurance claims check.)
Do you need personal injury protection if you have health insurance?
You may not need PIP if you have health insurance, but PIP does provide some good extras that health insurance doesn't, like covering lost wages if you can't work, and services for essential household tasks if you can't do them. Also, if your health plan has a high deductible, PIP is a way to pay medical bills without a huge out-of-pocket expense.
What is the difference between personal injury protection and medical payments?
PIP and medical payments (MedPay) coverage are similar in that they both pay your medical bills after a car accident no matter who was at fault. But MedPay doesn't reimburse for lost wages or essential services that you can't perform, like house cleaning.
Does PIP cover car damage?
No, PIP doesn't cover car damage. If someone else hit your car, you can make a claim against their liability insurance for the vehicle damage. Or, if you have collision insurance, you can make a claim on that no matter who caused the accident.
Does PIP insurance cover passengers?
Yes, PIP covers anyone riding in your car.