What is PIP insurance and how much does it cost?

PIP Insurance stands for Personal Injury Protection Insurance or Personal Insurance Protection. Some people also refer to PIP Insurance as No-Fault Coverage. This type of insurance covers your personal injury expenses resulting from an accident.

Your need for and ability to obtain PIP Insurance varies by state. Some states make PIP Insurance mandatory.  A few other states make it optional. Additionally, PIP coverage often overlaps with other forms of insurance coverage.  Read more to find out if PIP Insurance is right for you.

What is PIP Insurance and what does it cover?

PIP Insurance is a type of personal injury coverage. This insurance covers your injury and medical expenses resulting from an accident. PIP Insurance also covers your passengers’ personal injury damages.  Moreover, even if you are not driving, you are still covered by your PIP Insurance. For example, if a car hits you when you are walking across the street, your PIP Insurance may still cover your medical expenses.

PIP Insurance can cover your lost wages if you are out of work due to an auto accident. Additionally, it may cover transportation costs to and from medical facilities, custodial services such as child care, and funeral expenses. PIP also offers death benefits, but they tend to be far less than life insurance offers.  Furthermore, it may pay your health insurance deductible when an accident occurs.

PIP Insurance covers these expenses regardless of fault in the accident. This means PIP Insurance covers you regardless of whether or not you are at fault. PIP Insurance covers your medical expenses if you run a red light and another car hits you.  If the other driver ran a red light, however, their liability insurance would cover your personal injury expenses in most states. In some states called no-fault states, your PIP insurance would still cover your injury and medical expenses.

What Does PIP Insurance Not Cover?

PIP Insurance does not cover property damage.  Additionally, it does not cover intentional acts. Moreover, if you are committing a crime such as drunk driving at the time of the accident, PIP insurance generally would exclude this accident from coverage. Also, driving the car for a fare would generally exclude accidents from PIP coverage. Driving for Lyft and Uber are examples of this.

What’s more, your PIP Insurance may not cover the full cost of your medical expenses. Your policy has a maximum amount set that your insurance company will pay out in the event of an accident. Therefore, you need to make sure that you have enough PIP or other insurance to cover your needs.

Where Are You Required To Have PIP Insurance?

Some states mandate drivers have PIP Insurance. Sixteen states and the District of Columbia require drivers to have PIP Insurance. The states include: Arkansas, Delaware, Florida, Hawaii, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania, and Utah.

Several states offer PIP Insurance but do not make it mandatory.  These states include New Hampshire, South Dakota, Texas, Virginia, Washington, and Wisconsin.  In New Hampshire, where you are not required to have car insurance, you should at least have PIP Insurance.

Should You Get PIP Insurance If You Already Have Health Insurance?

In states where PIP Insurance is optional, it may not be necessary. In fact, reducing the amount of PIP Insurance you have may be one way you can save on car insurance. Since health insurance and disability insurance both cover some of the same expenses as PIP Insurance, your state’s mandatory minimum limit for PIP Insurance may be enough. However, you need to make sure that your other insurances cover personal injury expenses.

On the other hand, you need to know that healthcare might not cover other expenses that PIP insurance covers such as lost wages and funeral costs.

Furthermore, if you do not typically have passengers you may not need as much PIP Insurance coverage. If you have a very safe car or tend to travel on safe roadways, you may not need as much PIP Insurance as well.

PIP insurance and Medical Payments Insurance: How are they different and do I need both?

PIP insurance and Medical Payments (MedPay) insurance both pay for medical expenses after an accident. However, PIP insurance covers more expenses, some of which might not be covered by MedPay insurance such as lost wages or childcare support. As such, in states that PIP insurance is required, you may not need MedPay insurance. However, some people who have both may get Medical Payments to cover your PIP deductibles.

Moreover, in some states where there is a low limit of how much PIP insurance can cover such as Florida and Kansas, you may consider having MedPay to provide supplemental coverage.

How much does PIP insurance cost?

As in any type of car insurance, PIP insurance cost varies depending on which state you live in, level of coverage, and deductibles. For example, $10,000 PIP insurance coverage in Texas for 30-year old male driver with good credit, on average, costs $150-$250 a year and about 15-20% total cost of your car insurance.

In order to get the best rate for your car insurance policy, you should definitely shop around with at least 3-5 insurance companies. Even if you are happy with your current car insurance company, you should price shop for your car insurance policy every 6-12 months to get the best rate.


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