What does PIP usually cover?
Here is a sampling of PIP coverages, which will vary by state:
- Medical bills for you and those covered on your policy (also covers you if you’re hit by a car while walking or riding a bike)
- Lost wages (if you/others are injured and can’t work)
- Household services (including childcare, house cleaning, yard work, etc.)
- Disability and rehab costs
- Death benefit (paid to your family if you’re in a fatal car accident)
Under PIP, coverage for medical bills will protect you and anyone covered on your policy. In some states, the non-medical benefits (wages, household services, disability, etc.) will cover you, your passengers, and family members in your household, even if they’re not insured on your policy.
PIP won’t cover any kind of property damage.
In the states where PIP is required, it’s automatically added on to your policy when you buy. In some states, you can choose which PIP coverages are included and the amount you want.
PIP usually comes before your medical insurance when paying out a claim. If you’re injured in an auto accident, in most states, your PIP coverage will be in the primary position and any health insurance, Medicare or Medicaid will be secondary.
Find out how PIP coverage works in your state
Pro tips for selecting the right amount or adding personal injury insurance
Consider your health insurance: If you have great health insurance, you could select a lower amount of PIP coverage. That may be a good strategy for saving money if you know you’re already well-covered under your health insurance. This is especially true if you have a low health insurance deductible.
Know which type of insurance pays first: PIP usually comes before your medical insurance when paying out a claim. If you’re injured in an auto accident, in most states, your PIP coverage will be in the primary position and any health insurance, Medicare or Medicaid will be secondary.
Consider your health insurance deductible: If you live in a state where PIP is optional, consider purchasing at the least the minimum amount of coverage if you don’t have health insurance or you’re on a high-deductible plan. In most PIP states, there is no deductible.
Add PIP if you don’t have life insurance: If you don’t have life insurance, adding PIP could help your family cover unforeseen expenses if you’re in a fatal auto accident.
Consider your lost wages: If your job requires physical labor, can you afford to miss time if you’re injured in an auto accident? If not, consider adding PIP or increase your limits because it covers lost wages (up to a specific amount and length).
What if my state doesn’t offer PIP?
In states where PIP isn’t available, you’ll have the option to select “medical payments” coverage on your policy. Medical payments typically won’t cover lost wages, but will cover funeral expenses and hospital bills for you and passengers in your car, regardless of fault. Coverage amounts vary by state, but they’re typically $10,000 or less, so medical payments should only be used as a supplement to your health or life insurance and not as a replacement.
Medical payments can also be used for deductibles, copayments, and out-of-pocket expenses related to an auto accident. You have the flexibility to decide how to apply your medical payments. You might consider using your health insurance for your medical bills and medical payments for your high deductibles and copays.