PIP Car Insurance Guide: What You Need To Know

PIP car insurance covers the costs of medical bills or funeral expenses that result from a car accident. Some states require drivers to carry PIP on their car insurance plans (PIP car insurance in MI and PIP car insurance in FL, for example). PIP car insurance rates are $12/mo on average in the US.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 20, 2021

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Here's what you need to know...

  • PIP stands for personal injury protection.
  • Some states require drivers to carry PIP on their car insurance plans.
  • PIP can be costly to add to your insurance plan.
  • Your health insurance may overlap coverage with a PIP insurance plan.

Many drivers do not fully understand Personal Injury Protection (PIP) insurance. This special type of auto insurance may or may not be a part of your policy.

PIP insurance claims are very common and it is helpful to understand the ins and outs of this insurance prior to being in a situation where you need to make a claim.

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Learning about personal injury protection insurance and PIP claims now can save you a lot of headache down the road.

Understanding PIP will help you make educated decisions when it comes to choosing or evaluating auto insurance providers, adding features to your policy, and making claims.

What PIP Insurance Means

PIP is not a separate type of insurance from regular auto insurance. However, not all auto insurance includes PIP.

PIP is an added feature or benefit of your insurance policy. In some states, personal injury protection insurance is mandatory for all drivers. In other states, it is at the driver’s discretion if they choose to carry PIP coverage.

Personal injury protection insurance is designed to cover the costs of medical bills or funeral expenses that incur as the result of an automobile accident.

This coverage is specifically for the driver and policyholder, but it can also cover passengers and in some cases, pedestrians.

Many people don’t realize that while a traditional automobile insurance plan will cover damage to your car or, potentially, property as a result of an automobile accident, most will not cover extended hospital or medical bills from injuries that are incurred because of the accident.

Unless you have personal injury protection insurance, you will need to find another way to cover these costs.

It’s very likely that you will be in a situation where you will incur medical bills as a result of an automobile accident at some time in your life. Hundreds of car crashes occur every day. In 2014, there were nearly 33,000 auto accident related fatalities.

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Why PIP Claims Can Help You

Many drivers underestimate how high their medical bills could be if they are involved in an automobile accident.

According to the National Safety Council, the average cost of a non-fatal, disabling injury sustained in an automobile crash is $70,200!

This includes such factors as medical bills and lost wages. Even a non-disabling injury can result in huge costs.

In many cases, health insurance can help cover the costs of such injuries. However, not everything is covered by health insurance.

Many plans have high deductibles or annual limits that can be quickly reached. In such cases, a combination of personal injury protection insurance and your health insurance can extend your coverage and reduce the amount of money that you pay out of pocket.

If you or someone in your family does not have health insurance coverage, PIP insurance is even more important.

Having PIP can help you avoid the staggering medical bills associated with injuries from a car accident. In some instances, it can even help replace lost wages if you are out of work due to your injuries.

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When PIP Claims Are Necessary

If you are involved in an automobile accident, you may be questioning whether you should file a personal injury protection claim. This decision will vary based on several factors:

  • The type of accident
  • The details of your policy
  • The injuries involved
  • Any other coverage, such as health insurance that you may be carrying

If you are injured in a car accident, filing a claim may be the furthest thing from your mind. However, you will want to try to sort out the details of your claim and PIP insurance as soon as you are able.

This will help you understand what your options are and what costs you may be liable for.

Speaking with a trusted advisor or representative from your insurance agency can help you understand how and when to file a personal injury protection claim.

If you have a comprehensive health insurance policy, you will want to look into the details and any overlap between the two plans before proceeding.

If you are injured in an automobile accident and you do not have any health coverage at all, you will almost certainly want to file a PIP insurance claim to help with your expenses. Otherwise, it is possible that hospital and medical bills could cost you tens of thousands of dollars!

When you are the policyholder and someone else is injured in an accident that you caused or were involved in, it may be more difficult to determine whether you should file a personal injury protection claim.

Check with your insurer to make sure you understand the details and limits of your coverage, so that you can determine together if the other individual is covered under your insurance plan.

The Process for Filing a PIP Claim

Because personal injury protection insurance is just one facet of your total automobile insurance policy, filing a PIP claim is straightforward and easy. You will follow the same process you normally would for any car insurance claim.

  • It is important to get in touch with your insurer as soon as possible after an automobile accident to start the process of filing your claim.
  • You will want to make a detailed statement about the circumstances surrounding the accident, and provide as much information as possible.
  • If you are admitted to the hospital or suffer injuries, keep a careful record of your conditions and treatment. This may be necessary in order to complete the claims submission process.

You may have a choice of whether or not to make a PIP claim when you’ve had an automobile accident.

Your decision will be guided by several factors, such as whether or not you have health insurance and the severity of your injuries.

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Costs Associated With PIP Claims

While having personal injury protection insurance can save you a lot of money in the case of an accident, you should also consider the potential costs associated with the policy.

Having personal injury protection insurance can be very costly. If your state mandates this coverage, you won’t have much choice.

However, if you are adding personal injury protection as an optional coverage, you should know that it could significantly increase the cost of your auto insurance policy. The Miami Herald explains how PIP insurance fraud contributes to rate hikes.

PIP insurance can add up to $150 per month or more to your policy. This depends on numerous factors, including your risk level, where you live, and the type of policy coverage that you choose.

Because of the high cost, many Americans avoid optional PIP coverage. If you have a strong, health insurance policy already, you should carefully compare the benefits and see if any additional value provided by personal injury protection insurance is worth the extra cost.

You should also be well-versed in the specifics of your personal injury protection policy. Just because you are carrying a PIP plan does not mean you will be immune to any costs incurred from injuries because of an automobile accident.

Plans may have varying deductible and coverage limits. Certain circumstances and treatments may be covered, while others may not.

Costs of personal injury protection insurance can also extend well beyond the incident of the claim. Unlike health insurance, filing a PIP insurance claim can affect your premium.

This means that after you have filed a claim, you may be penalized by paying more for your auto insurance for years to come.

This can be an important fact to consider if you have the choice between using your health insurance and using your PIP coverage to pay for medical expenses.

When Not to File a PIP Claim

Whether or not you file a personal injury protection claim is a personal decision and depends on the circumstances.

If you have comparable or better coverage from your health insurance than from your auto insurance policy, it is usually better to use your health insurance because those premiums will not rise as a result.

If you are in an accident where injuries are minor and costs are low, you will also want to carefully weigh the benefits of using your PIP plan.

In some cases, it may make more sense to pay a small amount out of pocket and avoid your premiums rising for a long time. Of course, this is a dangerous game.

If you end up needing more expensive treatment down the road, you will probably be ineligible to submit a PIP claim so far after the event.

PIP can be an important tool in your automotive insurance policy. However, it’s important to know all the features, benefits, and ramifications of using this insurance before making a claim.

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