What is personal injury protection on car insurance?

Personal injury protection, or PIP as it's commonly known, is a form of car insurance that can help cover the costs of medical bills, lost income, funeral expenses, essential home services and more for you and your passengers following a car accident. PIP is a required coverage in 15 states, but in others, it's optional or may be unavailable. Coverage amounts and options for PIP vary widely between states, from $2,000 in Virginia to unlimited coverage in Michigan. Some states have a low or zero deductible for PIP, meaning this coverage could be very helpful to drivers without health insurance or who have a high-deductible health plan.

What is PIP insurance?

PIP insurance may provide coverage if you or your passengers are injured in a car accident, regardless of who is at fault. This also applies to injuries you may incur as a pedestrian or cyclist. Although coverage limits and options can vary, PIP generally covers:

• Medical bills
• Rehabilitation
• Physical therapy
• Lost wages
• Funeral costs
• Essential services

Essential services can include the cost of hiring someone for household maintenance or childcare if you cannot cover these responsibilities due to injuries from a covered incident. For example, if you cannot clean your home or walk your dog due to injuries resulting from an accident, PIP may help cover these costs.

States where PIP coverage is available may allow drivers to purchase additional coverage and limits, but not always. In addition, most states designate how PIP coverage can be used, have a cap on different expenses and have laws in place for when PIP coverage is voided. 

For example, New York requires all drivers to carry PIP auto insurance. While the basic no-fault coverage required is $50,000 per person, the state only allows payments of 80 percent for lost earnings up to a maximum of $2,000 per month for three years, and $25 per day for essential services for up to one year. However, if a driver is found intoxicated at the time of the accident, they may be ineligible for no-fault coverage. 

With each state and auto insurance company having vastly different rules and coverage options, it is important to work closely with an experienced agent when selecting coverage.  

In some states, PIP may not be available and it's typical for drivers to have medical payment coverage (MedPay) instead. While medical payments also covers medical-related costs regardless of fault, the limits and options are usually less robust. 

What does PIP not cover?

It’s important to understand what PIP covers and how it works to know what coverage level is right for you if PIP insurance is available. 

PIP does not cover:

• Liability: Bodily injury or property damage you cause to others.
• Comprehensive or collision: Physical damage to your car. 
• Uninsured/underinsured motorist: Injury or vehicle damage caused by a driver who is uninsured or does not have enough coverage.

Which states require PIP?

While about half of the states in the U.S. offer PIP coverage, there are only 12 states that are considered pure no-fault states. Drivers are required to carry PIP coverage and have limited tort, meaning they can only sue the at-fault driver under certain extreme circumstances. In these states, PIP insurance is usually referred to as no-fault insurance.  

As part of the no-fault insurance system, PIP insurance is designed to cover medical expenses and lost wages for you and your passengers quickly and efficiently. Without the delay of carriers needing to determine fault before payout and tort limitations, the ultimate goal is to reduce the number of smaller personal injury lawsuits and speed up claim payouts. 

However, some states may allow you to opt-out if you can prove you have medical coverage that will pay for injuries. You will likely have to opt-out in writing to your auto insurer.

Do I need personal injury protection?

If your state requires PIP coverage, you will have to include it on your car insurance policy. But even if it is optional, it may be a good idea to consider it.

Optional personal injury protection coverage could be worth considering if you have a high deductible health insurance plan, limited health coverage or no health coverage. If you regularly have passengers in your car, consider their options for health care, as well. PIP may be a way to help cover medical costs and lost wages for you and the passengers in your vehicle should anyone get injured in a covered accident.

If you are wondering how much PIP insurance to carry or if you should carry the coverage if it’s optional, it’s best to talk with an insurance agent or your car insurance company. They can help you find affordable auto insurance with the coverage you need.

Frequently asked questions