Personal Injury Protection (PIP) Insurance Coverage: No Fault Insurance

If you’re looking for car insurance, then you may end up confused by the huge variety of policies and forms of coverage that you’ll come across. Over the course of this guide, we’re going to take a closer look at Personal Injury Protection (PIP) insurance. We’ll discuss what it is, what it covers, and a lot more.

Getting in to a car accident can be painful. No one wants to get hurt on the road. But other than physical pain, hospital visits can get quite painful as well, and you need to financially plan for the worst case scenario so you don't get caught off-guard. 

What is Personal Injury Protection?

Personal Injury Protection, or PIP Insurance Coverage (also known as no-fault insurance coverage), is a  car insurance  extension that covers and helps you minimize the costs of medical bills if you get in to a car accident and get physically injured.

Personal Injury Protection insurance is also one of the lesser-known forms of car insurance. Since PIP coverage isn’t available in every state, you may not even require PIP coverage to drive legally, but we’ll cover those details later on in this guide.

As the name suggests, PIP coverage covers  medical expenses  in the case of a car accident. While  bodily injury liability  exists to cover any injuries sustained by other parties in a  vehicle collision, PIP is designed to cover your medical bills if YOU end up getting injured in a car accident.

Personal injury protection is also referred to as no-fault insurance because in a no fault state, the responsibility for an accident does not have to be assigned before insurers pay out, which is meant to speed up the process of getting claim payments for medical treatment or vehicle repairs. 

Personal Injury Protection insurance coverage is typically only available in no fault states. In most no fault states, this means that personal injury protection is required by every driver, to a certain minimum level of coverage determined by the state. Along with medical bills, PIP coverage can also be used to pay for  funeral expenses after a deadly collision, G-d forbid.

Other than dire  costs  like those, PIP can also pay for your lost wages if you end up injured and unable to work because of the accident that you’ve been through. There are a few states where PIP is optional, including Washington, South Dakota, Texas, New Hampshire, and Virginia.

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What Does Personal Injury Protection Cover?

Here are the things that personal injury protection covers:

Medical Expenses

The number 1 thing that PIP is covering is medical expenses that have resulted from a vehicle collision. These bills can get pricey, and you don’t want to end up stuck in debt just because you got into a car crash. Being able to cover medical expenses in a timely manner is one of the main reasons that several states adopted no fault insurance.

Lost Wages

Losing out on months of wages can be just as devastating as being saddled with debt because of your hospital bills. For this reason, PIP is also designed to cover lost wages, up to a certain limit. The exact amount that is covered will depend on how much you pay for your car insurance policy and the provider you got it from.

Funeral Expenses

If a tragedy happens and you or one of the occupants of your vehicle was killed in a collision, the ensuing funeral expenses may be too much for grieving relatives to handle. In this occasion, a PIP insurance policy will pay out and cover any funeral costs that result from the accident.

Substitute Services

If you end up disabled or you must recover from an accident so that you can accomplish basic household tasks, your PIP coverage should also be able to pay for substitute services. For example, if you now require a maid to properly clean your house, your car insurance may end up paying for one.

What is Not Covered by Personal Injury Protection Insurance?

Here’s what PIP coverage won’t end up covering:

Damage to Your Vehicle

If your vehicle gets damaged in a collision, you won’t get any money so that you can repair it. If you wish to cover your vehicle damages in the event of an accident, this is what collision insurance coverage is for. The amount that you get in a payout will depend on how much you pay for your collision coverage though.

Damage to Other Property

PIP also won’t cover you from having to pay other people for property that was damaged in a collision. This is one of the main reasons that drivers must carry at least a minimum level of property damage liability coverage, as that will pay out for any property that was affected in a car accident that you were involved in.

Medical Expenses Beyond Coverage Limits

Every PIP policy has a limit to the amount of coverage that you can be paid out to cover medical expenses. If you reach or exceed this limit, anything beyond it will be your responsibility to pay out of pocket. This is why it’s crucial to make a compromise between monthly cost and your coverage limits.

Vehicle Theft

PIP insurance coverage also won’t pay out if your car ends up getting stolen. If you’d like to be protected from vehicle theft, then you’ll have to have comprehensive car insurance coverage as part of your policy as it will cover you in the event where your vehicle is stolen, vandalized, or damaged by weather conditions.

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How Much Personal Injury Protection Do I Need?

Since personal injury protection (PIP) is mandated in over a dozen states, there is a legal minimum amount of coverage that you’ll need. While there is no flat minimum for PIP, the average tends to be around $15,000 of coverage to reach the minimum so that you can legally drive.

However, some states have much higher minimum levels of personal injury protection coverage, including New York, Minnesota, and North Dakota. Here’s a table showcasing the minimum level of PIP coverage you’ll require across a range of different states:

State Minimum coverage
Delaware $15,000
Florida $10,000
Hawaii $10,000
Kansas $4500
Massachusetts $8000
Michigan Dependent on circumstances
Minnesota $40,000
New Jersey $15,000
New York $50,000
North Dakota $30,000
Oregon $15,000
Pennsylvania $5000
Utah $3000

Remember that if you don’t meet your state’s minimum amount of PIP coverage, you may end up having your license suspended for driving underinsured. Minimums are also subject to change over time, so while we always strive to keep you up-to-date, always be sure to confirm the numbers through independent research.

Do I Need Personal Injury Protection Insurance Coverage?

If you already have  health insurance  or medicare, PIP Insurance may not be needed. However, without a proper health insurance plan that specifically covers auto accidents or Personal Injury Protection coverage, the full medical costs caused by an auto accident related injury will come out of your own pocket…  UNLESS , you get Personal Injury Protection, aka PIP insurance, also known as no fault insurance.

You may want to ask yourself the following questions while exploring your options:  

  • Do you have a safe car ? You may be fine with a high deductible plan. 
  • Do you have a  health insurance  or medicare  coverage that covers personal injuries? You may not need PIP at all. 
  • Do you drive carefully and follow all the law? If your answer is  no, a low deductible option may save you the most money in the long-run.

Personal Injury Protection (PIP) coverage is an extension of auto insurance that covers medical costs, and in some events, also lost salaries due to an injury caused by auto accidents. 

PIP insurance is also known as no-fault insurance coverage, since it is being paid with no relation to any fault and legal liability. 

However, the PIP insurance premium rates of the policyholder who filed the claim, may be increased following its activation, as with many other insurance products. 

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How Much Does Personal Injury Protection (PIP) Insurance Cost?

PIP insurance coverage can cost anywhere from as low as $40 per month to few hundreds. It depends on the different factors that determine your car insurance rates, as well as the coverage level that you have chosen.

No Fault Car Insurance States

PIP insurance coverage is currently mandatory in the following states:

  • Delaware
  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Maryland (unless you sign a waiver upon buying the policy)
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Oregon
  • Pennsylvania
  • Utah

The following states require auto insurers to provide PIP insurance coverage, however these states also let the policyholder reject the PIP in writing:  

  • Washington
  • Texas
  • Arkansas (non-compulsory)

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