What Is PIP Insurance Coverage?
Personal Injury Protection, also known as PIP coverage, protects individuals involved in an injury accident in a state that has a no-fault law. PIP is often mistakenly called "no-fault" insurance. Unlike liability coverage, which pays for injuries resulting from an at-fault accident, PIP insurance pays for personal injuries regardless of fault.
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Function
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Personal injury protection coverage is designed to pay for an insured's medical expenses and lost wages resulting from an automobile accident. The coverage is intended to reduce liability lawsuits by having each insurance company pay for their own insured's injuries.
Advantages
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In states that do not have no-fault regulations, automobile insurance companies must perform investigations to determine who caused an accident before medical bills and other expenses are paid. One of the advantages of PIP coverage is that medical expenses are often paid quickly because companies do not have to dispute who was at-fault in an accident.
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Disadvantages
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The extent of PIP coverage is limited. PIP insurance does not cover damage to an insured's vehicle. Expenses exceeding the limits of the PIP insurance are not covered. Further, accident victims can not receive punitive damages or payments for pain and suffering under PIP insurance.
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References
- Photo Credit emergency injury image by robert mobley from Fotolia.com
