What is personal injury protection (PIP) insurance and who needs it?

What is PIP insurance? Personal injury protection for car accidents, or PIP insurance, is required in no-fault insurance states. If you live in a no-fault state, you will need to buy PIP to help cover medical costs associated with an auto accident since you aren’t allowed to sue the other driver for compensation. 

Even if it’s not required where you live, buying PIP is a good idea if you have a daily commute or live in a high-traffic area.

PIP insurance covers more than just medical bills. Drivers can use PIP to cover lost wages if they’re unable to work after an accident, and PIP will also pay for nannying and maid services to help around the home when they’re injured. 

Veterans usually get affordable PIP policies from USAA insurance, but you can find cheap auto insurance for veterans anywhere when you shop around. Keep reading to learn what PIP insurance is, who needs it, and where to compare veteran auto insurance quotes from multiple companies.

What is personal injury protection (PIP) insurance?

What is PIP insurance? The personal injury protection insurance definition sometimes refers to it as no-fault insurance because it covers you regardless of who is at fault for the collision. PIP coverage also extends to every passenger in your vehicle who is injured in the collision.

Personal injury protection (or PIP) pays for medical bills, including hospital and ambulance fees, and lost wages, and covers other associated household services if you are unable to work or care for your family after your injuries.

PIP may be an optional coverage or a mandated policy add-on depending on where you live. For example, no-fault insurance states have minimum personal injury protection insurance requirements you must meet to drive legally.

PIP insurance also comes with an auto insurance deductible. You pick the deductible when you buy the policy and agree to pay the amount upfront when filing a claim. Some personal injury insurance deductibles are as high as $1,000, so shop around with multiple companies to find the right policy limits and deductibles for your budget.

What does personal injury protection cover?

One of the benefits of personal injury protection insurance is that it covers a variety of medical and household costs for you and your passengers, including:

• Medical costs: PIP pays for medical and hospital bills, including surgery and rehabilitation, dental and optometric treatments, ambulance and nursing services, prescription medications, prosthetic devices, and health insurance deductibles.
• Lost income: PIP pays for lost wages up to a certain limit If you’re unable to work after an accident. State insurance laws set limits on how much wage compensation you can receive.
• Child care: PIP covers costs associated with child care while you recover from injuries sustained from the accident.
• Cleaning and household assistance: PIP may cover the cost of a personal care assistant to help with domestic responsibilities if your accident-related injuries make it impossible for you.
• Funeral and burial costs: Your PIP insurance can help cover the cost of funeral and burial fees if you or one of your passengers dies in an accident.
• Legal fees: PIP can cover certain legal costs depending on the elements of your claim.
• Survivor’s loss: PIP may replace a sudden loss of income if you die as a result of an auto accident.

It’s important to remember that PIP insurance only covers expenses incurred due to your collision with another vehicle. PIP is not a substitute for health insurance, although it can help cover health insurance deductibles and other fees.

In addition, unlike health insurance, the total amount of medical benefits you can claim is limited by your policy. For example, if you have a $10,000 limit, PIP insurance will only cover up to that amount. You will be responsible for any costs that exceed your PIP insurance limits.

What does PIP not cover?

Personal injury protection does not extend coverage to property damage. In other words, PIP insurance will not pay for damages to your vehicle — you need full coverage auto insurance to cover your car.

Further, PIP doesn’t pay for injuries or lost wages for other drivers. Coverage only applies to you and any passengers in your car at the time of the accident. You must carry bodily injury liability insurance to cover another driver’s injuries when you’re at fault.

PIP also doesn’t cover damage to another driver’s vehicle. Your property damage liability auto insurance pays for damage to a no-fault driver’s vehicle.

Who needs PIP insurance?

Drivers in no-fault insurance states need to carry personal injury insurance as part of minimum liability auto insurance. Some tort states also have PIP minimums, while others offer PIP but allow drivers to opt out of coverage without penalty, like Virginia and Texas.

Use the table below to see which states require PIP insurance. We list PIP limits per person and the average minimum auto insurance rates by state, which includes the total cost of PIP and both types of liability insurance.

The cost of personal injury protection insurance will depend on the minimum requirements in your state. States with higher limits typically have higher rates. Likewise, states like New Jersey and New York offer additional coverage for lost wages and life-altering injuries, which will raise your rates. 

Personal Injury Protection vs. Medical Payments Insurance

What is medical payments insurance? Some states require medical payments coverage (or MedPay) in lieu of PIP. MedPay provides the same type of coverage for medical and hospital bills but does not pay for lost wages, child care, or household services.

The two states that require MedPay are Maine and Pennsylvania. Drivers in Maine must carry at least $2,000 worth of medical payments insurance per person, while Pennsylvania law requires $5,000 per person.

Just like with PIP, you can choose to carry higher limits to be better protected, but you must carry at least the minimum required by state law.

How to Buy PIP Insurance

Follow these tips when learning how to choose personal injury protection insurance at the lowest price:

• Choose your limits. States laws dictate how much PIP you need, and choosing the minimum limit will guarantee the lowest rates possible. However, you will be responsible for any medical costs exceeding your policy limits.
• Pick your deductible. PIP insurance rates are lower if you have a high deductible, but you’ll have to pay more upfront before coverage kicks in. Consider your budget and how much you’ll save per month before choosing a deductible that’s too high.
• Compare quotes. Get PIP insurance quotes online from multiple companies to see which insurer can offer you the lowest possible rates.

If you need PIP insurance, start comparing free auto insurance quotes with our comparison tool above. We provide veterans’ insurance rates from multiple local companies so you can find the best PIP auto insurance policy near you. 

The Bottom Line: What is PIP insurance?

Is PIP insurance right for you? If you live in a state that requires no-fault insurance, you’ll need to buy PIP to meet the minimum insurance requirements. 

State laws determine how much PIP insurance you need, but you can choose higher limits for better coverage. This will raise your auto insurance rates, but you’ll have better financial protection if you’re seriously injured in a collision.

If PIP insurance is not required where you live, you can still add it to your policy to supplement your health insurance. PIP doesn’t replace a health policy but covers things like lost wages and child-care services that health insurance does not.

Use our comparison tool below to find affordable PIP insurance for veterans and military personnel. Keep your state’s minimum requirements in mind and shop around with free auto insurance quotes from multiple companies to find the best PIP insurance rates near you.