Personal Injury Protection (PIP) is insurance coverage taken out to cover medical bills and work loss coverage for the driver and passengers in the event of a car accident. If you live in a “no fault” state, it is mandatory, as it offers medical coverage no matter who caused the accident.
What Does it Cover?
PIP covers your medical expenses, lost wages, and rehabilitation services in the event of an accident. It differs from traditional automobile insurance because, unlike traditional policies, PIP covers your bills regardless of who was at fault in the accident.
This means that even if the accident was your fault, the insurance policy will still pay out and cover the medical expenses incurred.
Where is it Mandatory?
In some states with “no fault” laws, PIP is mandatory. No fault laws are there to protect drivers from the delayed payout of automobile insurance. This means that in “no fault” states, even if the accident wasn’t your fault, your PIP coverage will pay out for your medical bills then recover the costs from the other party’s insurance at a later date.
Twelve states require some form of PIP coverage. These are Hawaii, Kansas, Kentucky, New Jersey, Massachusetts, Michigan, Florida, Minnesota, North Dakota, New York, Pennsylvania, and Utah
Does it Cover Everything?
Typically, the PIP policy will not cover everything. There are usually limits
on how much the policy covers. In some states, PIP will also only pay 60% of
the costs, in others this is increased to 80%. It is important to check your
individual policy to see exactly what your upper limits are and how much you
would be held financially responsible for in the event of an accident.
The majority of policyholders use PIP in conjunction with their health
insurance. This means that if you are hurt in an accident, your health
insurance will shoulder the primary costs for any medical expenses. The PIP
coverage will only pay for expenses that exceed the health insurance limits or
lie outside the scope of the health insurance coverage (like lost wages, for
example).
By using PIP in this way, road users can ensure they are not left with an
astronomical medical bill following an accident which required substantial
medical treatment.
Making a PIP Claim
In the event that you need to make a claim, your state will likely have set
guidelines on the process for doing so. In a PIP claim, unlike other forms of
personal injury claim, you are often required by state law to provide a
statement to the other party’s insurance company. You will also likely be
required to visit a doctor approved by the PIP insurer.
If you do not fully cooperate with the state law surrounding PIP claims, you
will likely have your claim denied and the insurer will terminate your
benefits. This is why it is of paramount importance to educate yourself on what
the specific law is in your state surrounding PIP claims.
PIP Claims and Auto Insurance
Getting auto insurance with two PIP claims is often difficult. Given the high rate of PIP fraud, many insurers do
not like to insure individuals with more than two PIP claims on their record,
even if the accident was not their fault.
Fortunately, there are independent insurers willing to buck the trend and
insure “high-risk” policyholders with two PIP claims or more on their record.
In some cases, the premiums may be higher, but all hope is not lost.
