Navigating the many car insurance coverages that pay medical expenses can be quite confusing. All in all, there are three primary types: medical payment coverage, the bodily injury limit of liability coverage, and PIP insurance (personal injury protection).
Moreover, even your regular health insurance can cover bills for injuries from a vehicle accident in some situations.
That’s why we decided to provide a complete guide for each of these protection plans, and PIP is on today’s menu.
So, here you will learn how it compares to other medical coverages, where it’s mandatory and where it’s optional, what limits you need, and which companies offer the lowest prices.
What Is PIP (Personal Injury Protection) Insurance?
PIP car insurance is the type of auto insurance that pays medical expenses for you and your passengers after a vehicle accident, regardless of fault. It was introduced in the 1970s, together with the no-fault system.
The goals were to streamline the process of determining responsibility for an accident and to lower insurance prices. Quite the opposite happened since most no-fault states have higher than average insurance costs.
PIP is mandatory in some states, optional in others and unavailable in the majority of them. Because it’s closely tied with the no-fault system in states where it is compulsory, it’s often called no-fault insurance.
What Does Personal Injury Insurance Cover?
Personal injury protection would cover medical expenses if you or your passengers were injured in a car accident. Additionally, it may include the following:
- lost wages due to injuries (this does not apply to all states, and you must be off work for at least 14 consecutive days)
- funeral costs
- services that you cannot perform because of your injuries, such as child and elderly care, dog walks, and similar tasks
- your health insurance deductible
- payments that exceed your health insurance limits
- payments for injuries you inflicted upon pedestrians with no health or car insurance
How Does PIP Coverage Work?
In no-fault states, PIP insurance repays your and your passengers’ injury-related expenses up to the limit regardless of who was at fault.
However, you’ll have to cover the deductible yourself. In general, insurers estimate that PIP covers up to 80% of the expenses from an accident injury.
If other drivers caused the accident, their liability insurance should reimburse your expenses in states without the no-fault system. Your PIP coverage would first take care of your medical payments up to your limits, minus the deductible.
Then, your insurance company will request compensation from the liability coverage of the at-fault driver. Alternatively, if you caused the accident, your PIP, MedPay, or regular health insurance can all help pay the health bills.
Where Is PIP Car Insurance Mandatory?
Namely, personal injury protection, or no-fault insurance, is compulsory in the following 14 states:
- North Dakota
- New York
- New Jersey
On the other hand, you can purchase it as optional insurance coverage in these seven states:
- South Dakota
- New Hampshire
Let’s say a word or two about PIP insurance in Texas. It is optional, as we’ve mentioned. Moreover, every driver is offered PIP as part of their liability insurance, and they are offered a minimum of $2,500 of PIP insurance.
Furthermore, people there can pay more for higher coverage amounts, like $5,000–$10,000 for extra financial protection.
In general, as PIP covers lost wages, a higher number of Texas drivers choose PIP over MedPay.
Personal Injury Protection Insurance Cost by State
The PIP insurance cost depends on several factors, like:
- coverage level
- type of vehicle
- insurance company
Namely, the table below shows average PIP premiums and 6-month premiums in several states, for a 30-year-old male driver, with good credit, no prior accident record, and driver of a 2016 Honda Civic.
|State||Average PIP Premium||6-Month Premium|
As we can see, the average premium for PIP insurance in Michigan is the most expensive one of all. Namely, the average PIP premium in the state is $628. Michigan also offers the most costly 6-month premium in the US, at $1,503.
All in all, the expenses of a personal injury protection claim have the most significant influence on the prices of this coverage.
In addition, the cheapest car insurance, including PIP insurance, in Florida, comes from GEICO. In the Sunshine State, the motor vehicle requirements and the regulation include $10,000 per accident of personal injury protection and property damage liability.
Kansas offers the lowest average PIP premium, at only $33. Then again, its 6-month premium isn’t that low compared to the others. That said, Hawaii offers the lowest 6-month premium, at $481.
The Benefits of Having Personal Injury Protection Coverage
The main benefit of having PIP insurance is that you won’t have to go through the lengthy process of determining who was at fault before receiving the insurance payout. You will get reimbursed as soon as possible, and you will only have to deal with your insurer.
Another advantage of PIP is that it covers lost wages and any additional expenses you may have because of your injuries. Even your passengers can enjoy the benefits of your coverage.
No-fault states require you to have personal injury protection, but you may want to check what your health insurance covers first in other places.
Moreover, insurance premiums are lower since PIP statutes restrict lawsuits and liability claims, and insurance companies save claim and litigation costs.
In addition, some health insurance policies carry an endorsement that eliminates payouts related to car accidents. Others can provide adequate coverage in these circumstances.
What Is Not Covered by the Auto Insurance PIP?
PIP coverage excludes several items that fall under other protection plans. Here is the list of what’s not covered:
- Damage to the other driver’s property resulting from a collision. Liability insurance would cover the costs of personal belongings and damage to the other driver’s vehicle if you were at fault.
- Damage to your car from a collision. To cover the expenses of repairing or replacing your vehicle, you will need collision insurance regardless of who was at fault.
- Non-driving damage to your car. Perils like theft, natural disaster, riots, vandalism, fire, and falling trees fall under comprehensive coverage.
Furthermore, no-fault insurance will not cover any expenses above your limits. However, in some states with no-fault, you may be able to sue for serious injuries or medical costs that exceed a specific dollar amount or a certain threshold.
In fact, in Kansas, Minnesota, Hawaii, Massachusetts, North Dakota, Utah, and Kentucky, a specific dollar amount of medical expenses has to be reached before you are able to sue.
PIP Insurance vs. MedPay
PIP and medical payment coverage work in a similar manner. They provide fast reimbursement for your medical expenses regardless of who was at fault.
PIP can be mandatory or optional coverage, while MedPay is always optional. Typically, only one of these coverages is available in your state.
The main difference between MedPay and PIP insurance is that MedPay includes expenses apart from medical treatment, like lost wages, child care, and similar outlays. Additionally, you can opt to buy MedPay without any deductibles or coinsurance.
What No-Fault Coverage Limits Do You Need?
So what is a sufficient PIP limit? For a start, you cannot go below the minimum that the laws of your state prescribe. However, these minimums are usually insufficient when an accident happens.
Florida’s insurance, for example, has minimum limits of only $10,000. If you opt for this, the chances are you’ll be adding money from your pocket even in a minor accident. Let’s not forget that around 26.7% of Florida’s vehicles are uninsured.
And the more passengers you have, the higher the expenses will be. We advise choosing at least $100,000 to have a decent level of security.
Tips for Buying PIP Insurance
As with all insurance products, the prices and the quality of the customer service vary significantly across the market. That’s why a little bit of research can benefit your nerves and your bank account.
Start by reading some of the many auto insurance reviews on our website. You’ll be able to find how each major US insurer scores in financial strength, customer service, affordability, and other important departments.
So, this will help you make a shortlist of the companies that are best for you. It doesn’t have to be long, but we recommend including at least five companies that offer no-fault coverage to start. Then get a quote from them, and try to find cheap PIP insurance.
Overall, an online quote takes anywhere between 8 and 20 minutes. Phone calls with an agent last a little bit longer but not more than an hour.
The whole ordeal shouldn’t take more than an afternoon, and you could end up saving a few thousand dollars and get higher quality insurance.
If you live in a state where price optimization is legal, you should shop around at every renewal term. Doing so demonstrates your willingness to switch to a better auto PIP insurance deal if there’s a chance.
Once your insurance company realizes that, they will offer their most competitive prices to keep you.
Tap yourself on the back, as you’ve just learned how to get the most out of your PIP insurance. In addition to that, we’ve also shown how the minimum limits may not be sufficient in most circumstances.
In the end, it’s up to your budget. However, we would like to mention that regarding PIP insurance, GEICO is one of the cheapest companies. Nonetheless, make sure to check how much coverage your regular health insurance provides to avoid doubling your protection.
Finally, at the risk of sounding like a broken record, we cannot stress enough the importance of shopping around for PIP car insurance. That’s the only way to be confident that you’re getting the best coverage at the lowest price.
People Also Ask
What does PIP insurance pay for?
If a car crash occurs, your PIP insurance can help with some expenses for you and your injured passengers, no matter who’s at fault. Moreover, this insurance applies even if you aren’t the driver.
For instance, if you are walking and a car hits you, PIP can help pay for the sustained injuries. Namely, it covers expenses such as lost wages, medical bills, and funeral costs. However, each state dictates the requirements for this coverage.
What is PIP insurance and do I need it?
This is a specific type of auto insurance, helping drivers with the medical bill costs for themselves and their passengers in case of a car crash, no matter whose fault the crash was.
Regarding whether you need it, in some states, that’s not even a debate issue, as personal injury protection is mandatory in most states where it’s available.
Then again, you should first verify if your regular health insurance protects you in the locations where it is optional. Also, check if your health insurance limits are adequate and if there’s no endorsement excluding payments related to car accidents.
How much PIP insurance should I have?
Although most states don’t offer or require this type of insurance, if you live in a no-fault state, you have to carry a minimum amount of PIP insurance. Moreover, that amount also varies by state.
However, you don’t have to only buy the minimum amount a state offers — you can purchase more.
That said, make sure to buy the amount you can comfortably afford, even if you live in states that don’t require this coverage. However, we advise choosing at least $100,000 to have a decent level of security.
How do I get PIP insurance?
If you want to collect PIP insurance after a car crash, you need to file a claim with your auto insurance carrier. Then, the insurance company will review it and pay out your benefits in order to cover your expenses.
However, there’s one issue you may face. As insurance companies earn money by collecting premiums rather than paying out claims, they might do their best to devalue your claim and only pay the minimum, if anything at all.