PIP Insurance Definition

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PIP insurance provides no-fault medical coverage for you in a car accident.
PIP insurance provides no-fault medical coverage for you in a car accident. (Image: luxury car - model toy car image by alma_sacra from Fotolia.com)

Personal Injury Protection (PIP) is the part of auto insurance that covers the medical expenses for you and the passengers in your car who are injured in an accident. Unlike liability coverage, which covers the other parties if you are at fault in an accident and is required in almost every state, PIP covers you and your passengers without regard to fault and is required in only a few states.

Why PIP?

Because PIP insurance pays for medical expenses without regard to fault, you can get immediate medical attention that you know will be paid for, up to the limits of your PIP coverage. If you do not have PIP coverage or health insurance that covers auto accidents, you either have to find a medical provider who accepts third-party claims (not all do) or pay out of pocket for your medical care and attempt to be reimbursed by either your or the other party's insurance company (depending on who was at fault).

If you have good health insurance that covers auto accidents and disability insurance, you may not need PIP or can buy only the minimum amount required. Understanding your personal insurance situation is important in making a decision about PIP.

Considerations

Auto insurance laws vary from state to state, and both the available and required PIP coverage are subject to state requirements. Depending on where you live and your insurance company, you may have various PIP options that go by various names. Sometimes PIP insurance is called medical payments.

Full PIP

Full PIP Primary provides coverage not only for injuries to you or your passengers in an auto accident but also provides income continuation, funeral expenses, death benefits and essential services expenses. Essential services typically covers things such as household cleaning that you are unable to do while injured.

If another health insurance provider covers injuries related to car accidents, you have the option of Full PIP Health Primary. This option also has income continuation, funeral expenses, death benefits and essential services expenses benefits.

Medical Only PIP

Medical Only PIP Primary provides primary coverage for injuries to you or your passengers in an auto accident without any of the other benefits of Full PIP.

If another health insurance provider covers injuries related to car accidents, you have the option of Medical Only Health Primary. However, this second option is not available if Medicare or Medicaid is your primary health insurance or if you are an active member of the military.

Expert Insight

Some health insurers do not cover injuries related to car accidents. If you are unsure of what your health insurance covers, select Full PIP Primary or Medical Only PIP Primary.

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