What is PIP insurance and do you need it?

Also called no-fault car insurance, personal injury protection or PIP insurance covers medical bills, hospital bills, and other bodily injury costs resulting from an accident, regardless of fault. PIP car insurance is legally required in some states, optional in others, and unavailable in some regions. The national average PIP insurance rates cost $155.85 annually.

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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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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

  • Personal injury protection or PIP insurance covers medical and hospital bills, rehabilitation services, and other costs resulting from an accident, regardless of fault
  • PIP insurance is legally required in some states, optional in others, and unavailable in some locations
  • PIP insurance is different from medical payments coverage and may still be necessary even if you have health insurance

Regardless of fault, personal injury protection or PIP insurance pays for hospital bills, medical bills, and other bodily injury costs resulting from an accident.

So depending on where you live, learning about PIP insurance is an essential part of understanding your car insurance policy.

Keep reading to determine how to file a PIP insurance claim, how much this coverage costs, how it interacts with other insurances, and decide if you need PIP insurance.

After discovering if you need affordable PIP insurance, compare quotes to find your best car insurance by entering your ZIP code into our free rate tool above.

What is personal injury protection or PIP insurance?

PIP insurance is required coverage in some states, optional in others, and completely unavailable in the rest of the country. What does PIP stand for? It is an acronym for personal injury protection.

What is personal injury protection? Essentially, it pays for necessary medical care and hospital bills resulting from a car accident, regardless of fault.

This separates it from your bodily injury liability car insurance coverage, which only pays for the other party’s medical costs in an accident you cause. Also known as no-fault insurance, PIP applies to your passengers and follows you if you’re in another car or are injured as a pedestrian or while cycling.

PIP coverage shares similarities with your health insurance and with another car insurance called medical payments (MedPay) coverage. However, PIP explicitly applies to injuries related to car accidents. Plus, it’s not as limited as MedPay coverage, which doesn’t apply to lost wages or necessary home services.

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What does PIP insurance cover?

You are familiar with the PIP insurance meaning, now let’s talk about exactly what this insurance protects you from. So, what is PIP coverage?

Technically, what PIP insurance covers may vary from state to state.

But essentially, it pays for hospital bills, medical bills, rehabilitation services, and other lost wages due to a car accident.

So it pays for necessary operations, hospitalizations, and any ongoing professional care.

Besides medical expenses, it may also extend to lost wages due to missing work, funeral expenses, childcare costs, and house cleanings if you cannot perform these duties yourself due to injury.

How do you file a PIP car insurance claim?

You file PIP car insurance claims in your mobile app, online, or over the phone, just like a traditional claim.

The coverage applies to any necessary medical treatments required immediately after an accident. So submit those forms for reimbursement to your insurance company.

Typically, unless specific laws are in place, you use your PIP coverage for payments before turning to your health insurance coverage.

Double-check the regional laws where you live and the procedure your insurance company follows to ensure your policy covers your medical costs.

For example, in New York, drivers must submit medical bills within 45 days for the treatment to be considered for repayment.

Never hesitate to ask your insurance agent for more information about the PIP insurance process and how state laws may impact your claim.

Do you need PIP if you have health insurance?

PIP insurance pays for medical care, so do you need PIP insurance if you have health insurance?

If you live in a state where PIP is legally required, you have to purchase whatever limits are mandated in your state, regardless of whether you have health insurance.

Otherwise, if it’s an optional add-on where you live, know that PIP coverage applies to some things not covered by your healthcare.

For example, PIP insurance pays for lost wages, funeral expenses, childcare services, and rehabilitation expenses in some states. Plus, some regional laws allow your PIP coverage to work with your healthcare.

Specifically, Michigan and New Jersey allow you to use your health insurance for the medical payments and then turn to your PIP coverage for lost wages and other necessary home services.

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Where is PIP insurance required?

You probably find yourself wondering, should I get PIP insurance? Are there any state requirements for having PIP?

Typically, PIP coverage is required in no-fault states. Therefore, it’s often referred to as no-fault insurance.

In no-fault states, your right to sue another driver is limited to certain tort thresholds. The threshold may be monetary or verbal.

Otherwise, after an accident, you rely on your own insurance policy to cover personal damages, regardless of fault.

So how does PIP relate to no-fault insurance? It provides all drivers with bodily injury protections, even in states where the right to pursue legal action against another driver is limited.

Other states have optional no-fault laws. PIP coverage may be available in those states. There are also at-fault or tort car insurance states. Whoever caused the accident uses their insurance policy to cover damages for all parties involved.

Some tort states do offer optional PIP insurance to drivers.

For example, in Texas and Washington, insurance companies must offer all drivers PIP coverage, but drivers can waive it.

The table below shows the PIP insurance requirements in the states that legally mandate this coverage.

PIP Insurance Requirements by State
StatePIP Insurance Requirement
Delaware$15,000 per person
$30,000 per incident
$5,000 for funeral expenses
Florida$10,000 per person
Hawaii$10,000 per person
Kansas$4,500 per person in medical expenses
$4,500 for rehab expenses
$2,000 for funeral expenses
$900 per month for disability and loss of income
$25 per day for in-home costs
Massachusetts$8,000 per person
Michigan$250,000 per incident
$50,000 for some qualifying Medicaid enrollees
Opt-out option available for some Medicare recipients
Minnesota$20,000 for medical expenses
$20,000 for income loss
New Jersey$15,000 per person
Up to $250,000 for severe or permanent injury
New York$50,000 per person
$2,000 death benefit
80% lost income or up to $2,000 per month
$25 per day for additional services
North Dakota$30,000 per person
Oregon$15,000 per person
Pennsylvania$5,000 per incident in medical benefits coverage
Utah$3,000 per person
$1,500 per person for funeral expenses
$3,000 death benefit
$250 per week or 85% of lost wages
$20 per day for additional services
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The coverage is titled Medical Benefits in Pennsylvania, but it is the same as PIP insurance, just with a different name.

The table above shows the states where PIP is required, all of which are no-fault states.

But you can also optionally add PIP car insurance to your policy if you live in Arkansas, the District of Columbia, Kentucky, Maryland, New Hampshire, South Dakota, Texas, and Washington.

In other states, you do not have the option to buy PIP insurance at all.

How much does PIP insurance cost?

So, how much does PIP insurance cost on average? According to the database report from the National Association of Insurance Commissioners (NAIC), the national PIP insurance average cost is $155.65 per year.

The table below shows the pure PIP insurance premium reported by the NAIC in the states where the data is available.

Average Annual PIP Insurance Rates by State
StateAverage Annual PIP Insurance Rate
Arkansas$12.27
Connecticut$27.32
Delaware$149.42
District of Columbia$27.23
Florida$204.39
Hawaii$51.15
Kansas$32.42
Kentucky$70.94
Maryland$55.26
Massachusetts$36.55
Michigan$470.91
Minnesota$97.41
New Jersey$193.93
New York$216.54
North Dakota$36.80
Oregon$76.10
Pennsylvania$52.10
Utah$31.28
Washington$70.45
Countrywide$155.65
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Overall, your PIP insurance rates depend on the state you live in, your policy coverage limits, and the deductible you choose.

What is a PIP deductible? It is an amount you pay out of pocket before your insurer steps in to pay the rest, up to your policy limits.

PIP doesn’t always have a deductible. In fact, it’s unusual and is an option in some states. Deductibles typically range from $100 to $2,000. Lower deductibles lead to higher rates, and higher deductibles lead to lower monthly costs. But be mindful not to select a deductible that is too high.

To secure your cheapest possible PIP insurance quotes, compare rates online from multiple of the best car insurance companies.

Is PIP insurance different from medical payments coverage?

Some people confuse PIP insurance with medical payments or MedPay car insurance.

The two insurances are similar, but MedPay coverage is more limited than PIP insurance.

What is MedPay coverage? It helps with medical and hospital bills resulting from an accident, regardless of fault.

But what is PIP insurance? It also covers medical bills after an accident regardless of fault. But it may help with lost wages, ongoing rehabilitation services, funeral costs, and home or childcare services.

So, is there ever a reason why you should invest in both PIP and MedPay insurance?

If your PIP limits are very low, adding MedPay may provide you with supplemental coverage to fill in any gaps.

But, typically, investing in both insurance types is redundant.

Plus, not every driver gets the option to choose both. In some states, like Virginia, MedPay is offered as an optional policy add-on, while PIP insurance is not available to drivers at all.

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PIP Insurance: The Bottom Line

PIP insurance covers medical costs, hospital bills, rehabilitation services, and other lost wages resulting from an accident. If you live in a state where PIP is legally required, you must add the mandatory PIP limits to your car insurance policy.

Otherwise, if you live in a state where the insurance is optional, adding PIP coverage is ideal for people with limited health insurance or those who want more substantial bodily injury protection.

But unfortunately, in some states, PIP insurance is not available.

To secure the best PIP insurance company for you, compare quotes online from multiple top companies.

Now that you know if you need to buy PIP insurance, enter your ZIP code into our free quote comparison tool below to receive rates from the best companies in your region.

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