Personal Injury Protection (PIP): What It Is, and How It Works
Contributor
Reviewed By Adam Ramirez, J.D.
Editor
Where you live greatly impacts the type of car insurance you need to buy. Personal injury protection (PIP) insurance is required in some states, and optional in others.
PIP insurance offers coverage for your medical bills and some additional expenses when you’re injured in a car accident. We look at what PIP insurance covers, how it works, and where you’re required to buy it.
PIP Insurance Meaning
So, what exactly is PIP insurance? PIP insurance is a type of car insurance that provides coverage after a car accident. It typically covers medical expenses and other related costs. Importantly, PIP insurance provides coverage regardless of who was at fault for the car accident.
Some states have adopted “no-fault” laws. These laws are intended to limit lawsuits for car crash injuries, resulting in the value of car accident settlements often being lower. These states require drivers to purchase PIP insurance coverage. In no-fault states, PIP insurance is sometimes referred to as no-fault insurance. A few states have not adopted no-fault laws, but still require drivers to carry PIP insurance under other laws.
In 20 states, Puerto Rico and Washington D.C. PIP insurance is either required or optional. In other states, PIP insurance is not required or offered at all.
States and Territories Where PIP Insurance is Required or Optional
| State | Required or Optional | No-fault laws? |
|---|---|---|
| Arkansas | Optional | No |
| Delaware | Required | No |
| Florida | Required | Yes |
| Hawaii | Required | Yes |
| Kansas | Required | Yes |
| Kentucky | Optional | Alternative law in place |
| Maryland | Optional | No |
| Massachusetts | Required | Yes |
| Michigan | Required, but Medicare recipients may opt out | Yes |
| Minnesota | Required | Yes |
| New Jersey | Required | Alternative law in place |
| New York | Required | Yes |
| North Dakota | Required | Yes |
| Oregon | Required | No |
| Pennsylvania | Alternative benefits required - no-fault until insurance benefits exceeded | Alternative law in place |
| Puerto Rico | Required | Yes |
| South Dakota | Optional | No |
| Texas | Optional | No |
| Utah | Required | Yes |
| Virginia | Optional | No |
| Washington | Optional | No |
| Washington D.C. | Optional | No |
How Does PIP Insurance Work?
PIP insurance steps in to provide coverage after a car accident, regardless of who was at fault for the accident. How much PIP insurance coverage varies by state and by the individual policy, so it is important to read your coverage details carefully.
Common PIP Insurance Coverage
Expenses that are commonly covered by PIP insurance include:
- Medical costs. This often includes medical treatment, ambulance service, nursing care, prescriptions, and medical supplies.
- Lost wages. If you are unable to work after a car accident, PIP insurance may reimburse you for income you lost.
- Service assistance. Some PIP policies reimburse for household cleaning and other support services if you are unable to manage tasks yourself.
- Funeral costs. In the event a car accident resulted in death, some PIP policies cover funeral expenses.
Common Exclusions From PIP Coverage
PIP insurance is designed to reimburse for injuries caused by a car accident. As a result, property damage is usually not covered. The same is true of property theft, such as if your car is stolen.
PIP coverage also is subject to coverage limits. If your expenses exceed what the policy covers, you won’t be fully reimbursed. Some states allow car accident victims to pursue personal injury lawsuits when your medical bills exceed your policy. A personal injury case seeks compensation for people who have been injured from the wrongdoing or negligence of someone else.
Not sure whether you can file a car accident lawsuit in your state? Fill out the form on this page to connect with a lawyer for a free case evaluation.
Who Needs PIP Insurance?
If you reside in a no-fault state, then you will have no choice but to purchase PIP insurance in order to drive legally.
For those living in states where PIP insurance is optional, it can still be beneficial. It offers you immediate paid access to medical treatment without waiting for a decision on fault. It also may provide coverage for expenses related to your daily life, such as recovering lost wages or paying for a household cleaning service.
In optional states, some drivers choose not to purchase PIP insurance. These drivers often rely on a personal health insurance plan to cover their medical expenses if they are involved in a car accident.
PIP Insurance vs. Liability Insurance
Even if you live in a no-fault state, PIP insurance alone may not be sufficient to protect you after a car accident. Almost all states also require you to carry bodily injury liability coverage. The difference between PIP insurance and liability insurance lies in whose costs it reimburses. PIP insurance covers injuries to you, while liability insurance covers injury to others when you cause an accident.
Not sure what to do after a car accident? Fill out the form on this page to get help today.
Frequently Asked Questions
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In no-fault states you’re required to buy PIP insurance whether you have personal health insurance or not. In states where PIP insurance is optional, you can compare coverage to decide whether PIP insurance is useful. Keep in mind that PIP insurance often covers things that aren’t covered by health insurance, such as lost wages.
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No-fault states set minimum coverage requirements for PIP insurance. For example, drivers in Minnesota must have PIP insurance of at least $40,000 per person. Drivers in Oregon must have PIP insurance of at least $15,000.
Consider your health insurance coverage when deciding how much PIP insurance coverage to purchase. The less coverage you take, the more financial risk you will experience after an accident.
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No-fault laws are intended to prevent lawsuits. In most no-fault accident cases, compensation comes from your insurance without regard to who caused the accident. Some no-fault states will allow for a personal injury lawsuit in exceptional circumstances. For example, Florida allows non-economic damages like pain and suffering to be awarded in cases involving serious injury.
Fill out the form on this page to get help with your car accident recovery today.
