What Is PIP or Personal Injury Protection Insurance Coverage?

Personal injury protection coverage, or PIP, provides payment for medical and other expenses caused by a vehicle accident, with no regard for which driver was at fault. This no-fault structure should prevent the claimant's auto insurance premiums from increasing because of the accident. The coverage functions partially as a health insurance policy for anyone in the vehicles who does not have health insurance.

Function

PIP coverage guarantees each individual up to the maximum amount of coverage for about 80 percent of reasonable and necessary medical expenses, except for the deductible.

Importance

PIP insurance is important for drivers who often have passengers along, especially if these people do not have health insurance. Without PIP, the driver may be liable for medical expenses.

Work and Child-Care Expenses

Aside from medical expenses, PIP may cover lost earnings and child care expenses while the person recuperates.

Further PIP Features

PIP also may include coverage for loss of enjoyment of life, disability and compensation for pain and suffering. Additionally, PIP may cover funeral expenses.

Mandates

A total of 14 states require PIP coverage to be included in all auto insurance policies as of 2008. According to Pilgrim Insurance, PIP claims account for over 30 percent of losses under all auto claims.