What Is PIP Coverage for Auto Insurance?

Auto insurance reminder

PIP, or personal injury protection, provides insurance benefit to those injured while legally riding in or driving a policyholder's automobile. PIP coverage is available primarily to residents of "No-Fault" states.

Concepts

The National Association of Insurance Commissioners indicates that each state is required to regulate itself according to tort rules or no-fault rules. In a no-fault system, the insurance company pays benefits to its injured policyholder, regardless of fault.

Basics

PIP coverage is the most basic form of insurance protection available in a no-fault state. The insurance company will pay a specified benefit to those injured or killed while legally driving or riding in the insured's automobile, regardless of who was at-fault in the accident.

Features

Specific PIP benefits vary among companies. Common benefits include medical expenses, therapy and rehabilitation expenses, lost wages, funeral and burial costs and survivor loss benefits.

Insight

Twelve states operate under the no-fault system. Ten states operate under the tort system but allow PIP coverage to be sold by individual companies.

Considerations

Total expenses and benefits payable under a PIP plan typically are limited with respect to the length of time or total amount paid.

References

• A consumer guide to auto insurance