What is Personal Injury Protection (PIP) Car Insurance and Should You Have It?

Personal injury protection (PIP) insurance covers your medical bills and lost wages when you or your passengers are injured in a car accident. PIP is optional in most states. However, 16 states require you to carry a minimum amount of PIP coverage. PIP insurance may overlap with your health or MedPay insurance, but there are times when multiple policies are recommended.

What is Personal Injury Protection?

Personal injury protection, also known as “no-fault insurance,” pays the medical bills and rehabilitative costs for you and your passengers after you’re injured in a car accident. PIP also extends to instances when you’re a passenger in someone else’s car, or if you’re hit by a car while a pedestrian or cyclist. PIP insurance is different than bodily injury liability insurance in that, while PIP coverage pays for your own expenses, liability insurance pays for the medical expenses of drivers and passengers in other cars when you are at fault for an accident.

PIP insurance may include some of the same coverage as your health insurance or Medical Payments policy. However, PIP coverage is specifically written for car-related injuries, which are sometimes excluded from health insurance policies, and PIP insurance covers a number of additional expenses not covered by MedPay insurance.

What Does Personal Injury Protection Cover

PIP insurance covers necessary medical procedures as well as reasonable expenses related to rehabilitation as you recover from an accident. The types of expenses covered vary by state, and may include:

Do You Need PIP if You Have Health Insurance

If you live in one of the 16 states where PIP coverage is required, you must file a claim under that policy before you turn to your health insurance. But even if it isn’t required in your state, PIP insurance offers several benefits that you won’t get from a health insurance policy, such as coverage for lost wages and funeral costs.

A few states, such as New Jersey and Michigan, have provisions so that your PIP coverage will work in conjunction with your health insurance policy. For example, if you’re injured in a car accident in Michigan, your health insurance policy may cover your physical injuries and your PIP would cover additional economic losses, such as wages you lost while you were in the hospital.

How Do You File a PIP Claim?

You submit a claim like any other type of insurance, either online or through the phone. PIP will help pay for medical expenses necessary immediately after the accident. But for ongoing, non-urgent claims, you’ll be required to review or pre-approve your treatment plan with a medical expert of your insurer’s choosing or an outsourced medical claims processor. Your auto insurance provider can also approve partial reimbursements, or even have you examined by a medical provider of their choice. The amount your policy covers may vary depending on your plan and on your state. For example, in Florida, PIP coverage will only pay for 80% of your medical costs.

It’s critical to follow your auto insurance company’s process and timeline. In New Jersey, for example, any medical care or treatment within the first ten days after the accident must be approved and certified by your insurer. Failure to provide the required “Attending Provider Treatment Plan” and its documentation can result in a co-payment penalty of as much as 50%, regardless of whether the procedure or diagnostic test was medically necessary or reasonably required. New York requires all medical bills to be submitted within 45 days of treatment to be considered for payment; otherwise, written explanations must be provided. Ask your insurance agent for their PIP claim process requirements and keep a copy on hand in case you’re injured.

How Does PIP Work with Other Types of Car Insurance?

If you’re injured by another driver and have personal injury protection as part of your car insurance policy, you would typically exhaust your PIP coverage first before turning to other options. If your medical costs exceed your policy’s limits, you can then file a claim under the other driver’s liability insurance policy. However, if you are significantly and permanently injured, or if your medical bills exceed your state’s tort threshold, you may bypass your PIP coverage and file a lawsuit against the other driver.

Minimum PIP Requirements by State

PIP insurance is sometimes called “no-fault insurance,” since a minimum amount of PIP coverage is required if you live in a no-fault state. In these states, your own insurance policy will cover your expenses—even if another driver caused the accident—unless a certain threshold is met. These thresholds, called “tort thresholds,” may be either monetary or verbal, depending on your state.

Monetary thresholds require medical expenses for an individual or accident to exceed an amount designated by your state before you can file a lawsuit against another driver. Verbal thresholds specify a certain type of injury that must be met before you file a lawsuit. Although the language used varies from state to state, verbal thresholds typically specify that an individual must have sustained significant and permanent loss of a bodily function, injury or disfigurement—or death. Other variables, such as if a driver was under the influence of drugs or alcohol, can also change how tort thresholds are applied.