What are the pros and cons of PIP insurance?

Personal injury protection (PIP) provides extra protection and covers medical expenses for you and your passengers after an accident. PIP insurance rates can increase your monthly payment by up to $100.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

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® Joel Ohman

UPDATED: May 4, 2022

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Here's what you need to know...

  • Some insurance policies do not cover injuries resulting from a car accident
  • Personal Injury Protection (PIP) can help cover expenses not under regular policies
  • There are different types of PIP available but not every person needs every type

Personal Injury Protection, or PIP insurance, can be a valuable add-on that can cover medical bills, lost wages, and other costs resultant from an auto accident. However, PIP can also be expensive.

Read on to educate yourself about the different types of Personal Injury Protection insurance, what they cover, and why they might be right for you.

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What PIP Insurance Means


Personal Injury Protection insurance is exactly what its name suggests, a part of your auto insurance policy that specifically deals with the costs of bodily harm because of an automobile accident.

Most people focus on liability coverage and potential damage, repairs, or replacement costs associated with their vehicle when they are shopping for car insurance.

Medical costs of an accident are often overlooked, but they can be some of the most expensive aspects of car accidents.

Personal Injury Protection insurance is needed quite frequently in the case of automobile accidents. In fact, some states make it mandatory.

To find out if your state requires PIP insurance, check with your local Division of Motor Vehicles or a reliable source such as for guidelines.

Personal Injury Protection insurance may also be called no-fault insurance because the benefits are paid regardless of fault, or liability, of the driver.

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Benefits of PIP Insurance


PIP insurance can provide valuable coverage in the event that you are involved in an accident that causes injury to you or someone else.

The costs associated with an injury can be some of the highest costs incurred as a result of an automobile accident.

If you do not have PIP insurance, you could be forced to pay medical costs out of pocket. If your automobile accident resulted in injury to someone else, they could potentially sue you for the costs.

A PIP insurance plan can also have a lost wage benefit that compensates the injured party for time spent out of work due to hospitalization or rehabilitation from injury.

This benefit could protect you and your family if you are unable to work for a time as a result of injuries sustained in an automobile accident.

Drawbacks of PIP Insurance

Factors written on a chalkboard

Personal Injury Protection insurance plans vary from state to state and provider to provider. Some plans are more comprehensive and affordable than others.

Before you decide if PIP coverage is right for you, you should carefully investigate the options associated with the available plans.

In some states, PIP insurance may cover more alternative treatments such as acupuncture. In others, this is not included.

In addition, some aspects of PIP insurance may be duplicative with health insurance coverage that you are already carrying.

Having a claim on your PIP insurance can also cause your premiums to rise. For some, this is a necessary trade-off to receive the valuable benefits of the plan.

However, if you already have duplicate coverage from your health insurance, you would want to make a claim under that plan instead of PIP. Unlike auto insurance premiums, health insurance premiums do not rise in the event of a claim.

PIP insurance can also contribute to higher levels of fraud, and higher costs to drivers, in states where it is mandatory such as New York State and Florida.

The Cost of PIP Insurance

There are many different variations of personal injury protection insurance.

You may be able to choose different coverage levels, a broader or narrower scope of coverage, and other options.

In some cases, the cost of personal injury protection insurance can add up to $100 or more to your monthly premium.

Because of the relatively high cost of PIP, it is important to research and decide if this coverage is for you before purchasing an optional plan.

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How to Know if Your Current Policy Includes PIP Insurance

If you live in a state that mandates PIP insurance, you should be comfortable that it is already included in your policy.

You can determine the level of personal injury protection insurance that you are carrying by checking your policy documentation or calling your insurer.

Remember that personal injury protection insurance may also be referred to as no-fault insurance or (AMP) auto medical payments coverage.

Deciding if PIP Insurance is Right for You


If your state does not require PIP insurance, then you will want to make the decision of whether or not to add it based on several factors.

First, consider if you are carrying any other insurance that may be duplicative. For example, your health insurance may provide much of the same coverage that you find attractive in PIP.

However, keep in mind that PIP insurance often covers not only you but also passengers and pedestrians, which your health insurance will not.

Secondly, you should consider your driving risk factors. The more time and miles you spend in the car, the more statistically likely you are to have an automobile accident.

Even if you consider yourself a very safe driver, you can’t control the actions of drivers around you.

Take all of your risk factors into account when determining whether or not carrying a personal injury protection policy is right for you.

How to Find the Right Provider for PIP Insurance

You may have decided that PIP insurance is a good fit for your needs, even if you do not live in a state that makes it mandatory.

The first place to start is with your current auto insurer. You can contact customer service via phone or email and ask them about their personal injury protection insurance options.

If you are interested in making a major change to your policy such as adding PIP insurance, it may be a good time to evaluate your policy and provider as a whole and determine if it makes sense for you to switch auto insurers.

You will want to gather quotations from several companies and benchmark them against your current provider.

Remember that price is an important factor, but it is not the only one to consider.

To investigate other factors, research potential companies with an independent consumer review board such as J.D. Power and Associates or A.M. Best to find out how they are perceived by customers.

If you do decide to carry PIP insurance, it can be a great reason to look into your auto insurance policy as a whole and re-evaluate your provider, plan, and premium.

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