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You never know if you’ll be in an accident. Covering you and your loved ones with PIP insurance makes sure they're protected no matter what.

Purchasing auto insurance can be tricky. You want to make sure that you buy the coverage that best protects you at a price you can afford each month. You know that you’re required to hold state-mandated liability coverage, but should you opt for things like comprehensive, collision, or even PIP insurance?

You might not be too familiar with that last one: personal injury protection, or PIP. However, PIP is an insurance coverage that might be worth considering for many drivers.

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What PIP Insurance Covers

Sometimes called no-fault insurance, personal injury protection (PIP) is supplemental coverage that can be added to an existing auto insurance policy. It’s designed to cover the insured party and their passengers, regardless of who is responsible for the accident.

Expenses covered by PIP may include:

  • Medical bills (sometimes even including dental procedures)
  • Transportation expenses (such as getting you to and from doctor’s appointments or therapy visits)
  • Lost wages
  • Essential services (like childcare, house cleaning, or lawn mowing)
  • Death benefits
  • Funeral expenses

The expenses covered by your PIP insurance need to be related to the accident in question. However, if you are injured and need surgery, will be going to therapy as part of your recovery, and need help with things like childcare or shoveling snow in the meantime, PIP can step in to help.

As with any insurance policy, it’s important to read the fine print. Not every policy will include each of the provisions listed here, and coverage limits will vary.

Who is Protected By Your PIP Insurance?

Your (valid) personal injury protection coverage will kick in following an accident, regardless of whether there is an at-fault driver. This means that both you, as the policyholder, and your passengers are protected, whether you are at-fault, another driver is at-fault, or even if there is no one deemed at-fault.

PIP coverage is only intended for the policyholder and passengers when they are traveling in the policyholder’s vehicle. While laws can vary from one state to the next, PIP insurance typically follows the policyholder, as well.

This means that if you purchase coverage and are involved in an accident as a passenger in someone else’s car, your PIP may kick in to protect you. This is typically the case in states where PIP is mandatory.

How PIP is Different from Other Coverage

There are many different types of auto insurance coverage. The coverage options you are able to choose will depend on the state in which you are registered to drive, as well as the insurance company you choose.

Typically, though, you are able to create a policy that includes liability coverage in addition to comprehensive, collision, and/or PIP coverage. But what’s the difference between them?

Required?Mandatory in most statesNever mandatoryNever mandatoryMandatory in some states, optional in others
Protects your own vehicle (property damage)NoYesYesNo
Protects another driver’s vehicle (property damage)Yes, if you are at-faultNoNoNo
Covers medical expenses if the other driver is at-faultYesNoNoCan cover remaining expenses
Covers medical expenses if you are at-fault, or if no one is deemed at-faultNoNoNoYes
Can cover expenses such as childcare, house cleaning, lawn care, etc.NoNoNoYes
Can cover funeral expenses and/or provide a death benefit if you are at-faultNoNoNoYes

These aren’t all of the differences between your coverage type options. As you can see, though, PIP insurance is intended to protect you (and your passengers) if you are injured in an accident … regardless of who is responsible for the crash.

PIP is Required in Some States…

There are currently 13 states that require drivers to hold PIP coverage. They include Delaware, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.

Three other states are required to offer PIP coverage to drivers, but it is not mandatory to purchase. Instead, drivers in Maryland, Texas, and Washington may opt-out in writing if they prefer.

If you live in one of those states, you don’t have to worry about adding PIP coverage to your auto insurance policy. Since it’s mandatory, it will be added to your policy by the insurer, along with any other state-mandated minimum coverage limits.

…But PIP isn’t Available Everywhere

PIP coverage isn’t available in every state, unfortunately. However, if you live and drive in a state where purchasing PIP isn’t an option, you will typically be able to buy what’s called MedPay.

MedPay is similar to PIP in that it will cover accident-related medical bills, regardless of who is at-fault for the crash. The difference is, while PIP will also jump in to cover things like transportation, household expenses, death benefits, and funeral expenses in many cases, MedPay is intended to cover medical expenses only.

Doesn’t My Health Insurance Protect Me, Though?

You might be surprised to learn that health insurance does not always cover medical expenses stemming from an auto accident. This could leave you unexpectedly holding the bag for tens (or even hundreds) of thousands of dollars in medical bills.

If the other driver is at-fault, their liability insurance will cover your medical bills (up to the limits of their coverage). If they are uninsured, however, or if you are responsible for the accident, it’s a much trickier situation.

In some states and with certain insurance companies, your health insurance may be willing to cover expenses for which another driver is not liable. Just be aware, though, you will still be responsible for any deductibles, cost-shares, and co-pays associated with that care. Additionally, few health insurance companies will cover things like dental surgery, and they certainly won’t help out with childcare costs or lost wages.

If your insurance provider denied your claims from an at-fault accident, would you be able to cover these costs out of pocket? If the at-fault driver doesn’t have enough insurance to cover all of your bills, could you foot the remaining balance?

If not, you should seriously consider purchasing PIP coverage.

Do I Need PIP Insurance Coverage?

The auto insurance policy you choose to configure is unique. Suited to your own budget, comfort level, and state requirements, your coverage may look very different from your neighbor’s, or even change every time your policy renews.

Every state has its own mandated coverage limits, intended to protect the drivers on their roads from property damage and/or personal injury. If your state doesn’t require personal injury protection coverage (or PIP), though, it’s definitely still worth a look.

PIP coverage can protect you and your passengers whether you’re at-fault for an accident or not. It will help cover your medical bills, lost wages, and even household expenses while you recover. In a worst-case scenario, PIP can even provide for funeral expenses and death benefits.

You never know when you’ll be in an accident. Covering you and your loved ones as best you can, though, is a great way to ensure they are protected … no matter what.

Author Bio

Total Articles: 100
Stephanie Colestock is a respected financial writer based in Washington, DC. Her work can be found on sites such as Investopedia, Credit Karma, Quicken, The Balance, Motley Fool, and more, covering a range of topics such as family finances, planning for the future, optimizing credit, and getting out of debt. She is currently working toward her CFP certification. Her full portfolio can be found at stephaniecolestock.com.

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