An In-Depth Look At Personal Injury Protection Insurance

personal injury protection insurance pip auto policy coverage

There are several different insurance varieties that you may want to have at various times in your life. For instance, if you own a business, you might need business vehicle insurance policies and business stoppage insurance. If you own a home and have a family, you’ll need homeowners and life insurance. 

Today, though, we’ll be looking at personal injury protection insurance, which some people abbreviate as PIP insurance. Some individuals also call it no-fault insurance. We’ll explain what it is, why you need it, and what it can do for you. 

What Exactly Is PIP Insurance? 

Understanding the benefits of personal injury protection is not all that difficult. This is a car insurance variety. If you’re in a car accident, it will cover things like medical bills, lost wages, funeral expenses, and more, no matter whether you caused the accident or not. 

Out of the 50 US states, 16 require drivers to have this insurance. Even if you’re a very safe driver, you’re probably going to feel good about having it in place. That’s because even the safest driver makes a mistake occasionally, and if you do, this insurance protects you. 

How Does This Insurance Work? 

Let’s say that you have a PIP insurance policy. You pay for it each month, or sometimes quarterly, depending on the provider. 

Once you have it in place, the policy will compensate you up to a particular amount for car accident- related costs. Those might include funeral expenses if the car accident killed a passenger in your vehicle. They may cover lost wages if you can’t work for a time while you’re recovering from a car accident injury. 

It might cover medical bills and rehabilitation costs. Perhaps you need to go through several physical therapy sessions while you rehab from a car crash injury. It might cover doctor visits or surgery costs as well. 

Who Pays For All This? 

After an accident, the policyholder pays for all these expenses, but first, they must file a claim. If you reside in a state that needs you to have PIP insurance, you file the car accident claim through your own company first. The company must pay the claim up to a threshold amount that the state sets. 

That might be a verbal or monetary threshold. If it’s monetary, that means the injury-caused expenses must be greater than a particular sum. If there’s a verbal threshold in place, that means the injuries have to meet a certain seriousness level. When we talk about seriousness level, what we mean is a permanent injury, losing a body part, etc. 

You should note that some small injury claims that happen in car wrecks do not go beyond the state-set threshold. If you injure yourself severely, or another driver does, the cost is likely going to be beyond what your PIP insurance legally covers. 

You have to meet the minimum threshold amount. At that point, you can file a claim with the other driver’s insurance carrier for any additional money you require. You might also file a lawsuit if you deem that action to be appropriate. 

What Else Does This Insurance Type Cover? 

We’ve already mentioned things like funeral expenses, medical bills, and lost wages. However, this insurance type does potentially cover some costs about which you would not necessarily think. 

For example, you might use this insurance to retrofit your house if the accident injured you permanently. You might install a ramp if you’re in a wheelchair. 

You might add a shower seat if you need to sit down now to bathe yourself. You might use the insurance policy money to hire a cleaning service if you cannot clean up your house as well as you used to. You might hire someone to mow your lawn or do landscaping if you can’t do that anymore. Often, there are additional ways a car accident injury can impact your life about which you might not immediately think. 

What Doesn’t This Insurance Type Cover? 

There are always some things this insurance doesn’t cover as well. Generally, it does not cover damage to either your property or that of the other driver. It does not cover injuries the other driver or their passengers sustained. 

You’ll need to read through your policy after an accident to determine with one hundred percent certainty what it does and does not cover. Each policy is a little different. 

What States Require It? 

At the moment, the states where you need to have this insurance variety include Utah, Pennsylvania, North Dakota, New York, New Jersey, Minnesota, Michigan, Massachusetts, Kentucky, Kansas, Hawaii, and Florida. Puerto Rico requires it as well. 

Are These Policies Worth It? 

Since individual states often determine how they want their citizens to behave, it makes sense that some have a mandatory PIP insurance requirement, while others do not. You might wonder if such a policy is worth it, though. 

The reality is that most people find the extra cost for this insurance a little onerous, but most of them don’t feel like it’s too bad. PIP insurance does not add a whole ton to your monthly or quarterly premium payments, and if you do get in an accident, you are certainly going to be glad that you have this policy in place. 

If you don’t have no-fault insurance coverage, you can use your health insurance to cover any car accident bills. However, some people don’t have very good health insurance. 

Maybe you got your insurance through the marketplace, or perhaps your job provides it to you. You have health insurance, but you may have a high-deductible plan. This means that if you have no PIP insurance and a car accident injures you, you might have to pay hundreds or thousands of dollars before you hit your yearly deductible. 

For many people, that’s reason enough to like having a mandatory PIP insurance policy. If you don’t like it, though, you can always move to a state that does not require it.

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