Personal Injury Protection coverage (PIP) is a policy-based coverage vital to protecting you from the high cost of medical expenses, income loss and ongoing expenses incurred from injuries involving an automobile. In states where PIP is optional, it is always offered and advised; however, it can be waived by signature. There are other states that are considered “No Fault” where PIP is required, and all injuries related to a vehicle accident are claimed. Agents and brokers are always advised to properly educate and counsel clients regarding their options for PIP, and also for the available limits in purchasing PIP coverage. As a general rule, more coverage means better protection. The slight increase in premiums is often worth the corresponding coverage.
Here are a few clarifying points from the statement above:
- PIP does not replace your personal medical coverage. Rather, it is designed to work as what we call “first party coverage” so if you have co-pay or deductibles associated with your personal medical plan, this coverage will pay from the very first dollar. This is important because co-pays add up and deductibles can be an unexpected financial burden when expenses arise. In addition, coverage includes supplementary benefits and is available “per person” – for example, you may have good medical/disability coverage, but do your passengers? PIP provides you freedom of coverage in these types of scenarios. Here is a list of what is included:
- Medical bills
- Lost wages as a result of the injuries
- Services necessary during recovery; i.e. house cleaning, child care
- Funeral costs and, in some states, death benefits
- PIP coverage pays out regardless of fault. In addition, medical expenses need only be associated with a vehicle accident, so you can use it for:
- you, your household family members, and/or your passengers in a vehicle you are driving, or
- others while driving a vehicle you own with your permission, or
- you and/or your household family members as a passenger in a vehicle you are not driving, or
- coverage is available as a pedestrian or cyclist if injured by a moving vehicle
- What PIP does NOT pay for?
- Damage to or total loss of your vehicle
- Additional expenses related to a vehicle accident, such as towing or a rental car. However, there could be a case made that if you have a driving limitation and require a specialized vehicle equipped for your driving needs (i.e. special lifts) you may fall under point one above.
The main purpose of this conversation is around the education and understanding of the value in PIP coverage. Whether you purchase the minimum $10,000 limit or higher, the value in PIP is the indirect risk reduction of lawsuits. It restricts legal action purely by eliminating or greatly reducing the exposure. PIP claims are almost always paid out quickly, further easing the pressure of the burdens they mitigate. Cost associated with the premiums for PIP vary greatly by state, but a range might be accurately estimated at $80-$90 annually.