What Is Personal Injury Protection (PIP)?

Personal Injury Protection (PIP) is a type of car insurance coverage that helps pay for medical expenses and related costs after an automobile accident. It’s commonly referred to as “no-fault insurance” because it provides benefits regardless of who was at fault in the accident. PIP is typically required or offered in states that follow a no-fault insurance system.

PIP doesn’t just cover medical bills. It may also pay for lost wages, rehabilitation expenses, and essential services if you're unable to manage daily tasks during recovery. Depending on the policy, coverage can extend to family members and even pedestrians injured by your vehicle. In no-fault states, PIP is designed to provide quick access to health care without the need to establish fault or pursue legal action.

Is PIP Required by Law?

Yes, Personal Injury Protection (PIP) is mandatory if you live in one of the 12 no-fault states that require drivers to carry minimum PIP coverage. This ensures your policy can cover your own medical expenses after a car accident. Lawmakers made PIP mandatory in the following states to accelerate access to medical care, reduce the number of lawsuits, and keep minor injury claims out of the court system:

1. Florida
2. Michigan*
3. New York
4. New Jersey*
5. Massachusetts
6. Minnesota
7. Kansas
8. Hawaii
9. Utah
10. Oregon
11. North Dakota
12. Pennsylvania
13. Delaware
14. Maryland*
15. Kentucky*

Please note that Personal Injury Protection (PIP) coverage is a required component of the auto insurance system in all no-fault states. However, if you’re in states like Kentucky, Maryland, New Jersey, and Michigan, you may opt out of PIP coverage if you meet specific legal requirements to reject or exclude it. 
 
Besides, in many at-fault states, PIP is optional and sold as an add-on. Common optional states include:

• Arkansas
• New Hampshire
• South Dakota
• Texas
• Virginia
• Washington

How Does Personal Injury Protection Work?

Personal injury protection (PIP) works as a safety net that protects you right after a car accident. Instead of waiting for the other driver’s insurance company or a lawsuit, your own auto insurance comes in and pays for your medical care.

Here’s how it works in practice. When you’re injured in an auto accident, you file a PIP claim with your own insurer. Your PIP coverage starts paying for medical expenses, lost wages, and sometimes even rehabilitation or therapy.

The beauty of no-fault insurance is speed. You don’t have to prove negligence or wait for courts to assign legal liability. Instead, you get direct payment for your care, which helps cover urgent health care needs without delay.  

In many states, PIP benefits also extend to family members, passengers, or even a pedestrian hit by your car. And the limits depend on your insurance policy.

Whether you’re a high-risk driver seeking non-standard, affordable auto insurance or a regular Michigan driver wanting to add PIP coverage to your existing policy, contact USA Auto today to get your car insurance quote online. You can also reach out to us in person or call us at (866) 855-1872.

Practical Example of PIP in Action

Let’s say you live in Michigan, where personal injury protection (PIP) is required. You cause a car accident that leaves you with a broken arm, a back injury, and medical bills totaling $15,000. You also miss several weeks of work and lose about $3,000 in wages. This means you need to pay a total of $18,000 for health care.

In this scenario, since you have PIP, you don’t need to wait for a lawsuit or prove who was at fault. Instead, you simply file a PIP claim with your own insurance company. Even if you carry the minimum $50,000 PIP coverage limit, your insurance company will handle it all.

In contrast, liability auto insurance only pays for the other driver’s injuries. Even if the accident wasn’t your fault, you would have to wait months to resolve the case and receive your medical benefits. That’s why having PIP is so important.

What Does Personal Injury Protection Cover?

Personal Injury Protection (PIP) provides a wide range of benefits after a car accident. Depending on your state and policy. It may cover:

• Medical expenses like ambulance bills, hospital visits, surgery, prescriptions, and physical therapy.
• Lost wages if injuries prevent you from working.
• Essential services such as childcare, cleaning, or transportation while you recover.
• Rehabilitation costs, including ongoing therapy or recovery care.
• Funeral expenses in case of a fatal accident.
• Family members, passengers, and in many cases even a pedestrian injured by your vehicle.

What Isn’t Covered by Personal Injury Protection (PIP)?

Although PIP covers many things related to medical care, it doesn’t cover everything. Here’s what it typically won’t cover:

• Vehicle repairs, property damage, or theft of your vehicle. For that, you will need auto collision insurance and comprehensive car insurance.
• Pain and suffering or non-economic damages (these usually require legal claims).
• Injuries to other driver or their passengers if you’re at fault.
• Property damage to the other driver. You need property damage liability insurance for that.
• Medical expenses beyond your PIP limit, unless you have health insurance or extra coverage.
• Damage to personal belongings inside your vehicle.
• Accidents outside your state if PIP isn’t recognized there.

How Much PIP Coverage Do I Need?

How much PIP coverage you need mostly depends on your state and personal situation. Some states set a minimum coverage limit and let you buy more.

Quick Rule of Thumb:

• Buy at least your state’s minimum if PIP is required.
• Buy more if you don’t have health insurance or if you have a high health deductible, risky work, or a low emergency fund.

Here are the state minimum PIP coverage requirements:

How to Choose Your PIP Limit?

• Compare PIP to your health insurance deductible and out-of-pocket max.
• Think about your income and how long you could be off work. PIP can replace lost wages.
• Consider higher limits if you lack solid health coverage or emergency savings.
• Remember, higher PIP limits raise premiums, but they reduce financial risk after injuries.

Comparing Personal Injury Protection Vs. Bodily Injury Liability

Personal Injury Protection (PIP) and Bodily Injury (BI) Liability may sound similar, but they serve very different purposes. As has been said, PIP protects you, your family members, and your passengers after a car crash regardless of fault. In contrast, bodily injury liability protects others. If you cause an accident that injures another driver or pedestrian, your BI liability pays their medical bills and related costs.

Here's a simple side-by-side view:

PIP Vs. MedPay: Differences

It’s easy to confuse Personal Injury Protection (PIP) with Medical Payment Coverage (MedPay), since both coverages help pay medical expenses after a car accident. But the two work differently.

PIP coverage is broader. It not only pays for your medical bills but also covers lost wages, rehabilitation, and sometimes essential services like childcare if injuries prevent you from performing daily tasks. In no-fault states, PIP is often required by law.

MedPay, by contrast, is more limited. It strictly helps with medical costs for you and your passengers, regardless of fault, but it does not cover income loss or additional services. MedPay is usually offered as an optional add-on in many states.

How Much Does PIP Insurance Cost?

It’s difficult to say the exact cost for PIP auto insurance as it varies based on your state, insurance provider, claim history, chosen coverage limit, driving record, and so on. However, on average, PIP coverage may add anywhere from $50 to $200 per year to your auto insurance policy. This cost can be higher in states like Michigan, as it offers extensive benefits and sometimes unlimited PIP protection.

How to File PIP Insurance Claims?

Filing a PIP claim is quite simple. Start by notifying your insurance company immediately after a car accident. Keep your insurance policy in hand. You will also need to provide details of the crash, medical records, and proof of expenses such as hotel bills or lost wages. Your insurer will then review your claim. Be sure to note down the details of the entire procedure. Finally, your insurer will pay covered costs up to your PIP limit. Deadlines for submitting claims vary by state, so act promptly.

Is Personal Injury Protection Worth It?

In a word, yes, in most cases.  PIP coverage offers fast access to money for medical expenses and lost income. You don’t need to wait for lawsuits to recover the losses. This coverage is required in no-fault states. It is also highly useful elsewhere if you lack strong health insurance or savings. The extra premium often costs less than paying thousands out of pocket after a serious automobile accident.

The Bottom Line

PIP undoubtedly provides critical support after an accident by covering medical bills, lost wages, and recovery costs. Fortunately, if you’re in a no-fault state or an at-fault state where PIP is mandatory or available as an add-on, you should strongly consider getting it, as it fills gaps that health insurance or liability coverage may not cover.

Frequently Asked Questions (FAQs) About Personal Injury Protection on Car Insurance

What does personal injury protection (PIP) pay for?

PIP coverage pays for your medical expenses, a portion of your lost wages, and sometimes rehabilitation or essential services after a car accident. In some cases, it may also help you with funeral costs.

What are the benefits of using a PIP claim?

The main benefit is speed. You don’t need to prove fault before getting paid. Your insurance company handles the bills right away, so you don’t need to go through all the stress and financial pressure after an auto accident.

How does PIP pay out?

Once you file a PIP claim, your insurer reviews the medical records and expenses. Payments are made directly to health care providers or reimbursed to you, up to the policy limit.

What is $10,000 personal injury protection?

This refers to a policy limit. For instance, Florida drivers must carry at least $10,000 in PIP coverage, which means your insurance policy will pay up to that amount for covered medical expenses, wage loss, and other related benefits after a car accident.