What is Personal Injury Protection (PIP) Insurance?

PIP insurance (also known as no-fault insurance) is a type of car insurance which covers costs like medical bills, funeral expenses, lost wages and other expenses after a car accident, no matter who is at fault for the accident. 16 out of 50 states in the US require drivers to have no-fault insurance policies.

How Does Personal Injury Protection (PIP) Insurance Work?

Drivers with personal injury protection (PIP) insurance are compensated up to a certain limit by their own insurance carrier for medical bills, rehabilitation costs, funeral costs, lost wages, and other costs caused by a car accident. This payout extends both to the driver and their passengers.

PIP insurance benefits are paid out to the policyholder after filing a claim for an accident regardless of who is at fault.

A driver who has just been in a car accident takes photos of the scene of the wreck so that he can document what happened and make a claim with his insurance.

In states where a driver is required to take out PIP insurance as part of their auto insurance policy, the driver files the car accident claim through their own insurance first and their insurance company is responsible for paying out compensation up to a threshold set by the state.

These thresholds may either be monetary or verbal, depending on the state.

A monetary threshold means that the expenses caused by the injuries must be greater than a certain amount of money while a verbal threshold means that the injuries meet a certain level of seriousness. The level of seriousness generally means the loss of a bodily function or a permanent injury.

Many small injury claims do not go beyond the threshold set by the state, but in cases of serious injuries, the cost may be too great for the driver’s PIP coverage. It is only after that minimum threshold has been met that the driver can file a claim with the other driver’s insurance carrier or file a lawsuit against the other driver to receive compensation for their injuries.

What Does No Fault Insurance Cover?

A woman who was injured in a car accident walks in a doctors office with the help of a cane and brace on her leg. Rehabilitation costs can be paid for by an injured driver's PIP insurance policy after an accident.

PIP insurance can cover the following costs for both the driver and their passengers:

  • Medical expenses
  • Rehabilitation costs
  • Lost wages Funeral expenses
  • Substitute services such as cleaning services if you are unable to clean your home because of your injuries

PIP insurance does not cover damage to either driver’s property or injuries sustained by the other driver and their passengers.

What States have No-Fault Insurance?

12 states and Puerto Rico require drivers to have PIP insurance and follow no-fault laws:

  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Pennsylvania
  • Utah

Some states do not have no-fault laws, but still require drivers to have PIP insurance policies. These states are:

  • Arkansas
  • Delaware
  • Maryland
  • Oregon

There are a few states where PIP insurance is available even though the states do not require drivers to have no-fault insurance and do not have no-fault laws. These states are:

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

Drivers in Washington D.C. can also purchase PIP insurance, although the District does not have no-fault laws.

Is PIP Insurance Worth it and are there Alternatives?

Drivers who live in a state that requires them to purchase PIP insurance as a part of their car insurance policy must have PIP insurance in order to legally drive.

If your state does not require you to purchase no-fault insurance, you may consider relying on your health insurance plan to cover any injuries you might sustain in a car accident. This, of course, depends on the benefits of your existing health insurance plan.

That said, it may be worth it to purchase PIP coverage even if you have a good health insurance plan because it may cover some things that health insurance will not such as paying back lost wages or paying for substitution services such as house cleaning.

How to Collect PIP Insurance

An insurance agent fills out an insurance claim form after a car accident. Injured drivers file claims with their own insurance companies first if they have PIP insurance.

To collect PIP insurance after a car accident, you must file a claim with your car insurance carrier. After you have filed your claim, the insurance company should review it and pay out your benefits to cover your expenses.

One problem with collecting PIP insurance which injured drivers may encounter is that, since insurance companies make their money by collecting insurance premiums rather than by paying out claims, your insurance company may do everything they can to devalue your claim and pay out the bare minimum if they pay out anything at all.

After a car accident, the best thing you can do is contact an experienced car accident lawyer to help walk you through the claims process to make sure you get the compensation you deserve. A skilled car accident attorney can also help get you compensation for the things that PIP does not cover, such as damage to your car, your property, and pain and suffering.

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David G. Bryant is certified to practice in all state courts in Kentucky, and federal courts in the Eastern and Western districts of Kentucky, Southern District of New York, Southern District of West Virginia, Northern District of Ohio, Middle District of Tennessee, and Western District of Pennsylvania. He is licensed to practice before the United States Supreme Court and the Sixth Circuit Court of Appeals.