If you have car insurance, then chances are good you’ve heard of auto Personal Injury Protection before. But do you know what it is, what is covers, and why it’s important?
Personal Injury Protection is an important coverage option for car insurance that can better protect you and your loved ones when an accident occurs.
Personal Injury Protection is an extended coverage option of car insurance. It covers medical expenses, and in many cases, lost wages.
Personal Injury Protection varies state-by-state, so it is difficult to define exactly how it works. In most states, however, Personal Injury Protection works relatively the same way, and here we discuss the most common uses for this coverage.
Auto Personal Injury Protection is often referred to by agents as PIP. The two terms can be used interchangeably when discussing this coverage.
Personal Injury Protection provides three very important benefits that should be highlighted. Those benefits are 1) lost wages 2) all-passenger coverage, and 3) no-fault coverage.
In most states, the fundamental difference between Medical Payments and Personal Injury Protection (PIP) is lost wages.
PIP insurance reimburses you for lost wages that result from an accident on the road that prevents you from being able to work for a time.
Depending on the policy, lost wages can cover up to 100% of the wages you earn. The percentage of your income, the length of time it applies, and the maximum amount it pays out will all be listed in your policy.
PIP insurance applies not only to those listed on the insurance policy, but also to all passengers in the vehicle.
Every passenger in the vehicle is awarded the PIP insurance benefits if an accident warrants medical attention.
For example, Personal Injury Protection will extend to your neighbor’s child you are transporting to soccer practice, your work colleague you are going to lunch with, and even the hitch hiker you pick up along the side of the road.
Perhaps the greatest benefit Personal Injury Protection provides is payments on a no-fault basis.
This means that regardless who caused the accident, your insurance company will pay up to your policy limits in PIP insurance coverage.
With Personal Injury Protection, you don’t have to worry whether or not the medical expenses will be paid; standard PIP insurance pays out regardless of fault.
Car insurance is mandated in the United State at a state level. This means that each state can (and does) have different insurance requirements.
Lawmakers in some states have deemed PIP insurance important enough that they require every driver who owns a vehicle to purchase not only auto liability insurance, but also PIP insurance.
Currently, there are 11 states in the United States that require this coverage:
If you live in any of the above states, you are required to carry at least a minimal amount of personal injury protection insurance.
Whether or not you should carry PIP insurance depends on your risk profile and your current situation.
PIP insurance should be vitally important to someone who does not have health insurance, or has very high health insurance deductibles.
It also might be an important coverage to someone who is often transporting other people to-and-fro in her car.
Every person should individually evaluate the benefits of Personal Injury Protection insurance to decide whether or not this is a coverage that should be carried.
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