What Is Personal Injury Protection (PIP) Insurance?
Personal Injury Protection (PIP) is a type of insurance coverage that can help pay for expenses like medical bills and lost wages for you and your passengers after a motor vehicle accident. This is a type of no-fault insurance, meaning it provides coverage regardless of which driver is ultimately deemed to have caused the accident.
PIP is not offered in every state, but in the states where it is available, it can be valuable coverage to have. Expenses after a car accident can quickly add up, and without proper coverage, the costs may become overwhelming. Learn more about how PIP works and how it works with the rest of your auto insurance policy coverages.
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An Increasing Need For Protection As Traffic Accidents Climb
American drivers have increased their time on the road year over year — in fact, there has been a nationwide 39 billion mile increase in driving within the past two years. Unfortunately, this has also led to a marked increase in traffic accidents. For example, about 116,000 people were injured by drivers running red lights in 2020 alone.
Accidents can be expensive, and without insurance, the cost of repairs or medical bills can quickly add up. In particular, personal injury protection can help with the medical expenses that occur if you are involved in a collision, especially if you also cannot work as a result of your injuries.
How Does PIP Insurance Work?
Personal injury protection is a coverage that drivers in many states can purchase through their auto insurance policies. In some states, it’s an optional coverage, while in others, it’s a required policy add-on. Refer to the chart further down this page to see if it is mandatory in your state.
PIP helps pay for your medical bills if you are injured in an accident, though how the coverage is divided between PIP and your health insurance depends on your state’s regulations. For example, if you are injured in an accident and live in a state where PIP insurance is required, you may need to file a claim under your PIP coverage before turning to your health insurance policy.
Some states, like Michigan and New Jersey, have provisions that allow PIP coverage and health insurance to work together. For example, your health insurance may cover the treatment for your physical injuries, while PIP insurance covers your lost wages. But even if your state does not require PIP coverage, you may consider adding it to your policy anyway, as it could provide additional protection in the event of an accident that results in your injury or death.
What Does PIP Insurance Cover?
PIP insurance coverage varies both by the insurer and by state. While your policy may differ, these are the common things that are covered in a PIP insurance policy.
- Medical expenses after an accident: It’s common for PIP insurance to cover the cost of reasonable and necessary medical and surgical treatment needed after an accident. Other costs that may be covered include optometric and dental treatment, ambulance services, medication, medical supplies, prosthetic devices, and nursing services.
- Lost wages from being unable to work: If your accident-related injuries prevent you from returning to work right away, your PIP insurance may compensate you for your lost wages. Some policies also provide similar benefits for covered individuals who are self-employed.
- Home care expenses: Injured parties sometimes find that they cannot perform common household tasks, like cleaning. In this case, your PIP insurance may cover the cost of hiring a service to handle these tasks for you.
- Childcare expenses: If your injuries prevent you from caring for your children, PIP insurance can help cover the costs of daycare services.
- Funeral expenses and accidental death benefits: If you or a passenger in your vehicle dies from injuries sustained in a covered accident, PIP insurance may cover funeral and burial or cremation costs. Surviving dependents may also receive compensation for the loss of a deceased person’s income.
- Other covered accidents: Depending on the state where you live, PIP insurance may cover you even if you’re not driving. For example, you may be covered if you’re hit by a car while riding a bicycle or walking. In some cases, you may also be covered by your PIP insurance if you’re riding in someone else’s vehicle.
What Is Not Covered By PIP?
As the name implies, personal injury protection insurance typically only covers expenses related to a personal injury or death. This means it excludes:
- Property damage: It does not cover damage to your vehicle, vehicle theft, or damage to property.
- Injuries sustained due to DUI or criminal activity: PIP insurance does not typically cover injuries to other drivers or injuries you sustained while committing a crime, such as fleeing from the police.
- Injuries sustained while using your vehicle for work: If you’re working for a delivery service, ride-sharing company, or doing other types of driving for pay, your PIP insurance may not cover injuries sustained while working. Instead, you may need commercial auto insurance for coverage.
- Injuries sustained due to accidents you intentionally caused: If you intentionally caused an accident, such as intentionally running your car into an object, your PIP insurance will not provide coverage for any injuries you incur.
- Costs exceeding your coverage limits: If your medical bills and/or lost wages exceed the amount of PIP coverage you have, you may not receive any additional reimbursement from your policy.
PIP Requirements By State
Some states, known as no-fault states, require all drivers to carry a minimum amount of PIP insurance. Drivers who live in these states may be required to file claims with their own insurance policies to cover their expenses, even if the other driver was at fault.
In at-fault states, each insurance company pays for damages based on each party’s degree of fault. PIP insurance may be an optional add-on in these states or may not be available at all. The following chart lists each state’s no-fault/at-fault status and minimum PIP requirements.
State | Minimum PIP Requirement | No-fault State? |
|---|---|---|
Alabama | PIP not available | No |
Alaska | PIP not available | No |
Arizona | PIP not available | No |
Arkansas | PIP optional | No |
California | PIP not available | No |
Colorado | PIP not available | No |
Connecticut | PIP not available | No |
Delaware | $15,000 per person / $30,000 per accident | No |
Florida | $10,000 | Yes |
Georgia | PIP not available | No |
Hawaii | $10,000 | Yes |
Idaho | PIP not available | No |
Illinois | PIP not available | No |
Indiana | PIP not available | No |
Iowa | PIP not available | No |
Kansas | $9,000 | Yes |
Kentucky | $10,000 | Yes |
Louisana | PIP not available | No |
Maine | $2,000 per person | No |
Maryland | $2,500 | No |
Massachusetts | $8,000 per person | Yes |
Michigan | $250,000 or opt-out | Yes |
Minnesota | $20,000 for medical expenses / $20,000 for non-medical expenses | Yes |
Mississippi | PIP not available | No |
Missouri | PIP not available | No |
Montana | PIP not available | No |
Nebraska | PIP not available | No |
Nevada | PIP not available | No |
New Hampshire | PIP optional | No |
New Jersey | $15,000 | Yes |
New Mexico | PIP not available | No |
New York | $50,000 | Yes |
North Carolina | PIP not available | No |
North Dakota | $30,000 per person | Yes |
Ohio | PIP not available | No |
Oklahoma | PIP not available | No |
Oregon | $15,000 per person | No |
Pennsylvania | $5,000 per person | Yes |
Rhode Island | PIP not available | No |
South Carolina | PIP not available | No |
South Dakota | PIP optional | No |
Tennessee | PIP not available | No |
Texas | PIP optional | No |
Utah | $3,000 per person | Yes |
Vermont | PIP not available | No |
Virginia | PIP optional | No |
Washington | PIP optional | No |
West Virginia | PIP not available | No |
Wisconsin | PIP optional | No |
Wyoming | PIP not available | No |
How Much Does PIP Insurance Cost?
PIP insurance can cost between $8-$75 per month, though some insurers may have coverage options with higher premiums. This wide range reflects the variables in setting the cost of PIP insurance, including:
- Your PIP policy’s coverage limit amount: The higher your policy limit, the more your premium will cost.
- Your PIP policy’s coverage criteria: The more benefits your policy provides, the more your premium will cost.
- Where you live: Those living in states that generally have higher costs of living and higher average incomes will likely pay more for their PIP coverage.
PIP vs. Other Insurance Options
Who It Covers | Covers Medical Bills | Covers Lost Wages | Covers Property Damage | Covers Additional Associated Expenses | |
|---|---|---|---|---|---|
PIP Insurance | You and any passengers in your car after a car accident | Yes | Yes | No | Yes |
MedPay Insurance | You and any passengers in your car after a car accident | Yes | No | No | No |
Liability Insurance | The other driver after a car accident you caused | Yes | No | Yes | No |
Health Insurance | You | Yes | No | No | No |
Disability Insurance | You if you become disabled due to illness or injury | No | Yes | No | No |
Workers’ Compensation Insurance | You after an injury sustained while working | Yes | Yes, partially | No | No |
In some cases, the coverage offered under PIP insurance may overlap with other insurance policies you already have in place. Learn how PIP compares and whether it can supplement other common injury-focused insurance options.
PIP vs. MedPay Insurance
PIP Insurance | MedPay Insurance | |
|---|---|---|
Who It Covers | You and any passengers in your car after a car accident | You and any passengers in your car after a car accident |
Covers Medical Bills | Yes | Yes |
Covers Lost Wages | Yes | No |
Covers Property Damage | No | No |
Covers Additional Associated Expenses | Yes | No |
Personal Injury Protection and Medical Payments (MedPay) are both no-fault auto insurance coverages that can cover accident-related medical and funeral expenses. However, there are some significant differences. Insurance companies are not required to offer MedPay, and the coverage is typically less extensive than PIP insurance.
For example, MedPay may only pay for expenses in the first year after an accident, whereas PIP tends to extend longer. It may also only reimburse you for health insurance deductibles and copays. In addition, MedPay may not cover chiropractic care, lost wages, or essential services.
However, in states where both MedPay and PIP are offered to drivers, you could elect to have both forms of coverage. In this instance, MedPay could step in if you exceed your PIP policy’s limits.
PIP vs. Liability Insurance
PIP Insurance | Liability Insurance | |
|---|---|---|
Who It Covers | You and any passengers in your car after a car accident | The other driver after a car accident you caused |
Covers Medical Bills | Yes | Yes |
Covers Lost Wages | Yes | No |
Covers Property Damage | No | Yes |
Covers Additional Associated Expenses | Yes | No |
Nearly every state mandates that drivers carry liability coverage that meets the state’s minimum requirements. Unlike PIP insurance, which pays for your medical costs after an accident, liability insurance pays for the other driver’s injury and property damage costs after an accident where you are at fault. For example, if you braked too late and hit the car in front of you, your liability insurance would pay for that driver’s medical bills and car repairs.
It is generally a good idea to have liability insurance because driving without insurance in states where it is mandatory can incur steep fines and penalties on your driving record. Even if you live in a state or area where car insurance is not mandatory, liability insurance helps protect you against steep medical and repair costs if you ever cause an accident with another driver. Pairing PIP with your liability coverage helps protect other drivers as well as yourself.
PIP vs. Health Insurance
PIP Insurance | Health Insurance | |
|---|---|---|
Who It Covers | You and any passengers in your car after a car accident | You |
Covers Medical Bills | Yes | Yes |
Covers Lost Wages | Yes | No |
Covers Property Damage | No | No |
Covers Additional Associated Expenses | Yes | No |
In many cases, drivers in states where PIP is required must first file a claim under their PIP coverage before turning to their health insurance policy. While PIP and health insurance may both cover the same types of medical treatment, there are some advantages to having PIP insurance coverage in addition to your health coverage. Your health insurance may have a deductible before it kicks in, while PIP insurance may have no deductible or a fairly low one, allowing you to have help in sharing costs much sooner.
PIP insurance typically covers passengers who were in your vehicle at the time of the accident as well, whereas health insurance only covers the insured individual. Your PIP coverage may also cover lost wages, which is not a benefit offered through health insurance.
PIP vs. Disability Insurance
PIP Insurance | Disability Insurance | |
|---|---|---|
Who It Covers | You and any passengers in your car after a car accident | You if you become disabled due to illness or injury |
Covers Medical Bills | Yes | No |
Covers Lost Wages | Yes | Yes |
Covers Property Damage | No | No |
Covers Additional Associated Expenses | Yes | No |
While PIP insurance is specific to auto accidents, disability insurance covers a broader range of situations that prevents someone from working and provides income protection to those who are unable to work because of an injury or illness. You can purchase this optional insurance coverage through your employer or as a stand-alone plan.
Disability insurance is also limited to protecting against lost wages, so it does not cover medical bills or other associated costs due to the injury or illness. If you have dependents who rely on your income during your working years, disability insurance could be a good idea to have.
PIP vs. Workers’ Compensation Insurance
PIP Insurance | Workers’ Compensation Insurance | |
|---|---|---|
Who It Covers | You and any passengers in your car after a car accident | You after an injury sustained while working |
Covers Medical Bills | Yes | Yes |
Covers Lost Wages | Yes | Yes, partially |
Covers Property Damage | No | No |
Covers Additional Associated Expenses | Yes | No |
Workers’ compensation insurance provides benefits to employees who are injured on the job or become ill as a result of their job. For example, if you are moving heavy file boxes and hurt your back or if your employer did not provide proper ventilation on the factory floor and, as a result, you developed a lung condition, you could be entitled to workers’ compensation insurance.
This coverage is purchased by employers for their employees and is mandatory in nearly every state for businesses that have more than five employees, though exact minimums and exclusion criteria vary by state. For example, all Washington employers with at least one eligible employee must provide workers’ compensation insurance.
PIP insurance, on the other hand, is not related to your job and instead is purchased by you, an individual. It is part of your auto insurance policy. If your job requires you to drive and you become injured while driving for work, either your commercial auto insurance’s PIP coverage or your employer’s workers’ compensation insurance will provide coverage for lost wages while you recover.
How to File a PIP Claim
In many cases, the process for filing a PIP claim is the same as it is for any other type of vehicle insurance claim. It’s often helpful to ask for a written copy of your insurance company’s PIP claims process and keep it on hand for reference.
There are generally two payout processes for claims with PIP coverage:
- Direct billing for medical coverage: When you have PIP coverage, your doctors will usually submit bills to your PIP insurer first until the policy’s limits are reached. After that, they will bill your health insurance company. You still must open a claim to begin this process.
- Reimbursement for non-medical coverage: For non-medical coverage through PIP insurance, such as lost wages, childcare, and home services, this coverage may work on a reimbursement basis. This means you may need to pay out of pocket first and retain all receipts, then submit those expenses for reimbursement.
Following the process and ensuring you meet all deadlines may help you expedite the claims process. You can expect to follow these general steps:
- Contact your insurer after the accident: To get started, contact your insurance agent or the insurance company directly to report the accident as soon as possible because some states have strict requirements regarding the timelines for treatment. For example, the state of New Jersey requires drivers to get treatment within 10 days of an accident to qualify for PIP coverage. Your auto insurance company may also have its own guidelines and requirements.
- Confirm your policy’s PIP details: Ask your insurance company to confirm your PIP coverage and provide you with your specific coverage details and limitations.
- Determine if you need pre-approval for any specific claims: In many cases, PIP covers medical expenses that are required immediately after an accident. However, if you need ongoing, non-urgent treatment, you may need to receive pre-approval.
- Gather necessary documents and information: You may need to speak to an adjuster, and they may ask you for verification and paperwork, including: the PIP application, your doctor’s report on your injuries, and a salary verification form from your employer if you are also seeking lost wages from being unable to work.
- File your claim: After you’ve contacted your insurer and provided the necessary paperwork and details, they may provide you with a claim number and contact information for the claims office.
Putting It All Together
PIP coverage can provide you with extra protection in case of an auto accident, especially if you or your passengers are hurt and cannot work afterward as you recover. This coverage can help cover the cost of medical bills, lost wages, and other related expenses that result from the accident. Some states mandate that drivers carry PIP insurance, but even if it is not required, it could be a good idea to have in place as it can supplement your health insurance coverage to lower your out-of-pocket expenses from your medical care.