Personal Injury Protection (PIP) Definition and Advice: Insurance Laws and Coverage

In the jumble that insurance jargon can often seem, terms like "personal injury protection" might get lost. When you buy insurance coverage, having the most information and understanding possible will help you to make a better decision. For that reason alone you should acquaint yourself with as many of these insurance terms as you can. Personal Injury Protection (PIP insurance) is related in some ways to No Fault Insurance, so that's another term with which you should become familiar with in the process.

What Is Personal Injury Protection Coverage?

Personal Injury Protection Coverage is a little unique in that it isn't available in every state. For the most part, states which do not have Personal Injury Protection Coverage are those which operate under no fault car insurance laws. That means that in the case of an accident the injured party's insurance provider handles their losses - no matter which driver is at fault. Looking to the states that do offer Personal Injury Protection Coverage, this coverage is designed to cover medical (and funeral) expenses for the driver, any others in his or her vehicle (or vehicles) - (including others driving his or her vehicle) and any pedestrians struck by the driver's vehicle in the case of an accident. The coverage is affected by a number of variations from state to state, too.

What Special Conditions Can Apply?

Based on the state laws there are some other conditions in which Personal Injury Protection can apply. In some states if you are walking down the street and get struck by a vehicle, your PIP insurance can cover your injuries. Similarly if you or a covered family member are riding in someone else's car and the car is involved in an accident causing injuries to the insured party, your PIP might pay for those injuries (again, it depends on the state).

Learn the Laws in Your State

Different states allow different limits for PIP insurance. Familiarize yourself with the laws in your state. Examine your needs and determine what levels would be best for you to carry. Then check them against those laws and see what you can do. Keep all of this in mind when you get an insurance quote. Remember when looking at an insurance quote that these numbers will be represented as two digit numbers, but that it is always a figure in thousands of dollars. So, "20" would mean "$20,000 of coverage". Many times you will see two numbers. The first is the maximum amount the insurance company will pay on behalf of each injured party. The second number will be the maximum amount they will pay out per incident - spread out among all injured parties.

Learning the ins and outs of insurance coverage makes you a better informed consumer. This will help you both to get the coverage you really need and to get the best price out there for the right coverage. Understanding the various types of coverage is a crucial step in this learning process.

Related Questions and Answers

The medical liability coverage (of the PIP coverage), or liability coverage is where you agree to pay for injuries and damages to the other vehicle in an accident caused by your car. Although there are 15 states, and the District of Columbia, that use no-fault insurance coverage, this is one basic requirement of a no-fault state. PIP coverage is Personal Injury Protection and requires your car insurance company to pay for any injuries you may have sustained in an "at-fault" accident - i.e. one you have caused. Medical insurance only covers the medical portion of the accident for the other party, while PIP insurance covers you and your injuries and repairs. It may also pay a daily wage stipend or mileage.

Insurance limits are applied to prevent from scams. Since the enactment of "no fault" insurance, the only requirement is a liability policy that covers the other driver's car if there is an accident. Other states have enacted Personal Injury Protection (PIP) plans that require your insurance company to pay certain expenses if your vehicle is involved in an accident. Research has shown that in those states where fraud rates have climbed, following the enactment of "no fault" and PIP coverage, that caps have been needed on this type of insurance. Thus, each of the 15 states, and the District of Columbia, that use no fault insurance have enacted insurance limits as to the amount that can be charged. Each state's limit is different.

Personal injury protection insurance is not necessary in no fault states. Even no fault insurance states have certain minimums of coverage that you must provide before you can put your car on the road. For the most part, you must provide comprehensive and liability insurance coverage before you can legally drive your car on public roads. There is no absolute requirement to have personal injury protection coverage, where your insurance pays if you are injured in a no fault accident. However, most drivers are careful to make sure they have this coverage available just in case they are injured. Usually, personal injury coverage is in the $50,000 range due to the cost of medical care in this country.