In the car insurance world, PIP is an important acronym. It stands for personal injury protection; if your insurance policy includes PIP coverage, then your own body as well as your auto's body can get repairs if needed after a collision. The most important aspect of PIP coverage is that the insurance company pays regardless of who is at fault for the accident -- the basis for the "no-fault" auto insurance system.
Many states mandate a minimum amount of PIP coverage as part of all auto insurance policies. Florida, for example, requires minimum $10,000 PIP coverage. A mandate means that the insurance company must offer it, and the insured must buy it. The premium for PIP coverage is bundled with other premiums charged on the policy, such as collision insurance and auto-glass coverage.
If you are injured in an accident and need medical attention, PIP coverage helps you meet the costs, as well as the costs of physical therapy, prescriptions, aftercare and other associated expenses. Liability is not a factor; your medical bills are paid by your insurance company regardless of who is at fault for the accident. If the limits of coverage have been reached, you may file a liability claim against the other driver's policy, if that driver was at fault for the accident. Your own insurance company can also file a subrogation claim against the other insurance company to recover its expenses -- again, if the other driver was at fault.
PIP coverage may also reimburse you for other costs, such as wages that you lost due to unavoidable time off from work. If the accident results in a death, PIP may cover funeral expenses. It may also cover the cost of therapy or psychological counseling required by accident victims. If other passengers in your car were injured, they use their own PIP coverage for medical expenses in some states, such as Florida. If they have no insurance, then your own PIP kicks in to pay the bills.
Other Accidents and UM
PIP may also cover you in any accident involving a car. This means if you are hit by a vehicle while walking across the street, or while riding a bicycle, your PIP coverage kicks in. It is customary for insurance companies to offer PIP with no deductible amount, although the insurance itself only reimburses a percentage of your expenses (commonly 80 percent). Also, because a minimum of $10,000 is not a lot of money considering health care costs, you can supplement PIP coverage with uninsured/underinsured motorist (UM) coverage, which helps pay bills if the other driver does not carry adequate insurance.
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