Posted by: Karl Eisenhower

Personal Injury Protection (PIP) insurance covers medical expenses when a car accident results in injuries to you, other drivers listed on your policy, members of your household and your passengers. These expenses can include medical bills as well as some other expenses that are not typically covered by health insurance such as lost wages.

PIP is often referred to as “no-fault” insurance, and it is available mostly in states with no-fault insurance laws. These laws eliminate the need to establish fault before covering medical treatment and certain other expenses after auto accidents that did not cause major injuries.

1. What Personal Injury Protection (PIP) Covers
2. How PIP Insurance Works
3. State Requirements
4. Do You Need PIP Insurance?

What Personal Injury Protection (PIP) Covers

Coverage varies by state, and coverage beyond medical care is often optional, but PIP insurance can include (up to the policy’s limits and after any deductibles):

1. • Medical expenses: Ambulance services, medical and surgical treatment, hospital stays, nursing, medication, medical supplies, x-rays, rehabilitation, prostheses, dental care, optical treatment and chiropractic services. In some states medical expenses are reimbursed at less than 100 percent, leaving the consumer responsible for up to 20 percent “coinsurance.”
2. • Funeral expenses: This includes funerals, burials, and cremations.
3. • Lost income: If you or your passengers are unable to work due to your injuries, PIP can help recover some of those wages. If you are self-employed and have to hire substitute employees, PIP can sometimes cover some of this cost as well.
4. • Child care expenses: If your injuries make it impossible to care for your children, PIP can cover child care expenses, such as babysitters.
5. • Survivors’ Loss: PIP can pay for loss of income and replacement services for surviving dependents.
6. • Household services: PIP can cover lawn care or house cleaning expenses if your injuries make it impossible to perform these duties.

Find the Cheapest Auto Insurance Quotes in Your Area Age 16-20 21-24 25-34 35-44 45-54 55-65 65+ Currently Insured? Find Insurers How PIP Insurance Works

If you live in one of the 12 no-fault states (highlighted in blue on the map below - link) and a car accident results in minor injuries, each party's medical expenses are covered by his or her own PIP insurance. There is no need to determine who caused the accident to get coverage, you only have to deal with your own insurance company, and you are not permitted to sue the other driver for compensation for your injuries unless they are severe.

Learn more about no fault insurance laws .

The alternative to “no fault” insurance laws is a “tort” system for paying claims for medical injuries. In these states, there are no restrictions on the right to sue. The at-fault driver – and that driver’s insurance – is responsible for compensating everyone injured in the accident.

Three tort states (highlighted in green on the map below - link) require all drivers to carry PIP insurance, and PIP insurance is available as an option in many other states. In the case of an accident in a tort state, PIP insurance provides immediate benefits to injured people in your vehicle, but collecting from your PIP policy does not limit anyone’s right to sue the at-fault driver for damages.

State Requirements

Fifteen states, shown on the map below, require all drivers to carry at least a minimum amount of PIP insurance. In addition, D.C., Delaware, Maryland and Oregon require insurance companies to offer PIP insurance to customers, but drivers in these states can waive the coverage.

Minimum PIP Coverage Levels Required by State

State	Minimum Coverage Required	No-Fault or Tort Laws
Delaware	$15,000 per person $30,000 per accident $5,000 funeral expenses	Tort
Florida	$10,000 per person	No-Fault
Hawaii	$10,000 per person	No-Fault
Kansas	$4,500 per person for medical expenses $4,500 for rehab expenses $2,000 funeral expenses $900 per month for disability/loss of income $25 per day for in-home expenses	No-Fault
Kentucky	$10,000 per person	No-Fault
Maryland	$2,500 per accident	Tort
Massachusetts	$8,000 per person	No-Fault
Michigan	Unlimited medical expenses Up to $5,189/month in lost income $20 per day for replacement services	No-Fault
Minnesota	$20,000 for medical expenses $20,000 for loss of income	No-Fault
New Jersey	$15,000 per person $250,000 for severe/permanent injury	No-Fault
New York	$50,000 per person $2,000 death benefit 80% of lost income up to $2,000/month $25 per day for services	No-Fault
North Dakota	$30,000 per person	No-Fault
Oregon	$15,000 per person	Tort
Pennsylvania	$5,000 per accident	No-Fault
Utah	$3,000 per person $1,500 per person funeral expenses $3,000 death benefit $250/wk or 85% of lost income (whichever is less) $20 per day for services	No-Fault

As of December, 2014

Do You Need PIP Insurance?

In the 15 states where PIP coverage is required, you must buy at least the minimum amount. Even if it is not required, buying PIP or MedPay insurance is good idea.

Think about what would happen if you were involved in an accident. If passengers in your car are injured, how would they get medical care? You may have health insurance for yourself and your family, but that won’t cover any other passengers. You may be able to collect from the other driver’s bodily injury liability coverage, but litigation may delay payments for several months. Keep in mind, too, that PIP can cover non-medical expenses.

As you evaluate your insurance needs, compare PIP coverage to medical payments (MedPay) insurance, if both are available in your state. MedPay, like PIP, covers medical bills without regard to fault. However, MedPay only covers medical expenses, so it can’t help with other costs like income loss or child care expenses.

MedPay’s biggest advantage is that it never makes the consumer pay deductibles or coinsurance for medical care, and it can pay for the deductibles, coinsurance and copays of other types of insurance – including your PIP coverage.

Learn more about MedPay insurance.

The chart below illustrates the similarities and differences between these two types of insurance.

Image: ChameleonsEye/Shutterstock

from Wallet HubWallet Hub


via Finance Xpress