Personal Injury Car Insurance
Personal injury car insurance, also known as PIP, covers medical and funeral expenses for injuries sustained in an auto accident regardless of fault. PIP insurance covers the insured, the insured's family, occupants of the insured's vehicle, and any pedestrians hit by the insured up to a preset dollar limit. PIP coverage is associated with no-fault insurance laws, and is only available in no-fault or partial no-fault states.
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History
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Personal injury protection was first introduced in the 1930s as a way to get around expensive, time-consuming litigation over auto accident injury claims. Personal injury protection is associated with no-fault insurance laws, which intended to bring down the cost of automobile insurance by limiting lawsuits and paying medical expenses directly through insurance regardless of who was at fault. By the mid 1980s, rising medical costs began to make car insurance in no-fault states with required PIP coverage more expensive than in states without no-fault laws and required PIP. Today, many states are repealing or reconsidering no-fault laws and required PIP coverage.
Coverage
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Personal injury insurance is the only part of an auto insurance policy that covers the insured's own injuries. In states that do not mandate PIP coverage, the insured's injuries are covered under the liability portion of the other driver's policy, but the insured has no coverage under his own policy. PIP also covers funeral expenses, and in some states provides coverage for lost wages and incidental expenses that arise due to accident-related disability--these expenses can include home health care, lawn mowing and housecleaning services.
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Limits and Waivers
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Personal injury protection pays up to a set dollar amount per person. This limit is determined separately by each state. In some states, policy holders must carry a minimum PIP limit, but the insured can choose to carry higher limits for an additional premium. In some states, an insured can opt out of most portions of PIP coverage altogether, or can purchase only the most minimal coverage by providing proof that auto injuries are covered under an existing health insurance policy.
No-Fault States Requiring PIP
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Personal injury protection coverage is required in the following eleven no-fault auto insurance states: Florida, Hawaii, Kansas, Massachusetts, Michigan, Missouri, Minnesota, New Jersey, New York, North Dakota and Utah. Ten other states combine no-fault laws with a limited ability to sue for accident-related medical claims. States with limited no-fault laws that offer personal injury protection insurance include the District of Columbia, Arkansas, Delaware, Kentucky, Maryland, Oregon, South Carolina, South Dakota, Texas and Virginia.
Choosing Personal Injury Auto Coverage
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No-fault auto insurance laws are complex, and personal injury insurance options vary widely from state to state. Talk to an experienced insurance agent familiar with state-mandated PIP options before making a choice, and make sure to ask about PIP waiver requirements in that state, deductible options, coverage limits and lawsuit limitation options. In some states, policyholders can opt out of PIP coverage completely if they can show adequate medical insurance coverage elsewhere. In other states, policyholders can choose to forego PIP loss of work coverage and other extras to reduce their auto insurance premiums. Policyholders without health insurance should not forego PIP coverage and will generally not be allowed to do so.
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References
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