After a car accident, if you have your own personal injury protection (or "PIP") coverage, here's what to know at the outset. PIP:
Let's take a closer look at what personal injury protection (PIP) is and how it works.
Sometimes known as no-fault insurance, personal injury protection is a type of car insurance coverage that pays for medical expenses and other financial effects stemming from an automobile accident. PIP works differently in each state, based on that jurisdiction's auto insurance requirements. However, a primary feature of PIP insurance is that it pays out regardless of who is at fault for the accident.
The reasoning for PIP is that car insurance companies can process claims much faster without having to worry about who caused the car accident. Additionally, courts can reduce the number of car accident lawsuits they handle because injured parties have an easier time receiving compensation from their respective car insurance companies rather than pointing the finger at each other in court.
The answer to this question depends on the state you live in and the specific terms of your PIP coverage. But the typical coverage includes:
PIP has several limitations, which necessitates the need for additional insurance coverage, like collision or comprehensive (for vehicle damage) and uninsured motorist coverage (for injuries). PIP usually won't cover:
According to the Insurance Information Institute, the following states require their drivers to have PIP coverage, or require insurers to offer PIP as an option to consumers at the point of purchase (the consumer is free to decline PIP):
In every other state, you can purchase personal injury protection (or something like it) from most car insurance companies—It's just not required coverage, and insurance companies aren't required to offer it to policy purchasers.
For the details on how PIP works in states where it's mandatory (these are called "no-fault" car insurance states), check out our article explaining the no-fault car insurance basics.
The exact claims process involving PIP insurance will depend on the circumstances surrounding the accident, as well as state law. But the following example should help illustrate how PIP coverage works after a hypothetical car accident.
Let's say you get into a car accident with another driver. Both of you suffer injuries and incur vehicle damage. If you both have PIP insurance, you'd both file PIP claims with your respective car insurance companies for reimbursement of your medical bills, regardless of fault. PIP won't cover vehicle damage, however.
If you're at fault, the other driver would likely file a claim under your property damage liability coverage. As for the damages to your vehicle, you'd file a claim under your collision coverage, assuming you have it.
If the other driver is at fault, things flip in terms of property damage. You'd submit a claim with the at-fault driver's insurance company under the property damage liability coverage and the at-fault driver would file a claim under the collision coverage, if they had it.
Keep in mind that when seeking PIP benefits, there could be certain conditions, such as a deductible or a co-pay. You might also need to seek your insurance company's approval for non-urgent medical expenses.
The vast majority of states require liability car insurance coverage, which pays out for damages and injuries sustained by someone else due to the fault of the policyholder.
For instance, if you run a red light and cause an accident, your property damage or bodily injury liability coverages would pay for the damages or injuries sustained by the person you hit. Liability coverage won't pay for any of your own losses. In contrast, PIP pays you for the injuries you sustained from a car accident, even if you're the one who caused it (but remember, PIP won't cover damage to your car).
Several variables can affect the answer to this question, including:
For example, let's say your health insurance plan has a high deductible, but your PIP plan would have no deductible. Also, your health insurer has the right to seek reimbursement for payment of any car accident-related medical bills, if you end up making a claim or receiving a settlement from a different source. In that situation, it's best to go with PIP.
Note that the choice might not be up to you. Your health insurance coverage might explicitly state that it's "secondary" to any car insurance coverage that would apply to pay for accident-related health care (the car insurance is "primary" here).
Remember that a big limitation with PIP is that it won't provide compensation for your pain and suffering. If you've been seriously hurt in a car accident, there might be a path toward holding the at-fault driver responsible for the entire spectrum of your losses.
So, after a car accident, if your losses exceed the PIP policy limits, or if you're running into complications of any kind, it might make sense to discuss your situation (and your options) with a car accident lawyer.