PIP is more than just a character in a Dickens novel. PIP is short for “personal injury protection.” It is payment for bodily injuries sustained in a car accident. In some states PIP is required, others it is only optional. It has some similarities with medical payments coverage , but also some important distinctions. Basically, PIP is a little complicated so lets delve deeper into the meaning of it.
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How Does PIP Work?
PIP coverage pays for the medical bills for the driver and passengers in a covered auto in the event of an accident. It covers these bills regardless of fault. This is important because PIP is sometimes required in No-Fault states. This means that if you get into an accident, your insurer will cover your medical bills up to a pre-designated limit. The same is true for the other vehicle involved in the collision. Their insurance company pays for their medical bills.
In the above scenario, your auto insurance company might choose to get compensated by the other driver’s insurer, if the other driver is at-fault. This is called “subrogation.” If your insurance company is successful, you may get your deductible back (sometimes the entire deductible, other times a partial repayment). However, it may take some time for this process to unfold, often over the course of many months.
In any case, you will receive payment for your medical bill payments right away, which is the beauty of PIP.
How Is It Different Than Medical Payment Coverage
Medical Payment Coverage is similar to PIP in that it will pay for your medical bills up to your policy limit. But PIP coverage offers a lot more in terms of protection. With PIP, you receive other benefits such as coverage for lost wages, funeral expenses, and replacement services (those you have to hire around your home for help).
PIP is also applies to family members and other occupants in your vehicle. It can also cover you if you are a pedestrian and are struck by a vehicle. It is important to mention that PIP, since it offers much greater protection, also comes with a greater cost. Like most things with insurance, the greater the benefits of a particular form of coverage, the more you are going to have to hand over for your premium.
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Should I Buy This Coverage?
First you need to see if this coverage is required in your state. At the moment, PIP is mandatory in the following twelve states:
• Delaware
• Florida
• Hawaii
• Kansas
• Kentucky
• Massachusetts
• Michigan
• Minnesota
• New Jersey
• New York
• North Dakota
• Oregon
• Pennsylvania
• Utah
See our state guides for more information, such as how much PIP you are required to purchase. This doesn’t mean you should purchase only this amount, this is simply what you are legally obligated to buy.
If the coverage is optional for you (or if you are wondering how much to purchase), you need to evaluate your insurance coverage and personal finances. Do you have health insurance? If so, how much does it cover? In some cases, PIP may offer some redundant coverages that may not be necessary. If this is true for you, you might want to buy the legal minimum of PIP or go without, if that is a option. You certainly want to be covered for things like lost wages, but you don’t need to carry two forms of coverage. PIP can fill in gaps that health insurance misses, so evaluate your health insurance coverage and decide if PIP is right for you.
Like many areas of car insurance, by researching your finances and insurance coverage, you can best decide what coverage is necessary and what you can go without. This way you only buy what you need, and skip what you don’t. This is one way of saving money on your car insurance. Another is to find the cheapest car insurance quotes available here at Cheap Quotes Car Insurance.