In many states, a fault system is used to determine who pays for bodily injury and property damage in a car accident. Usually, this is the driver who caused the accident. Some states, however, use a no-fault system, where the insurance company for each driver covers their own particular injuries and damage.
Personal Injury Protection insurance, also known as PIP insurance, is a major component of a no-fault system, as well as some at-fault systems. As a part of PIP coverage, insurance companies make medical payments on their customer’s behalf.
This is done to cut down on time spent in court and to ensure that injured parties are able to resume a normal life as soon as possible following an accident.
What Is PIP Insurance?
PIP coverage is designed to pay for the medical expenses of a driver injured in an accident. In many states, liability insurance offers bodily injury protection, which is paid by the insurance company for the at-fault driver. With PIP insurance, the injured driver’s own insurance company pays for any medical bills up to the policy maximums.
The amount of PIP coverage you have to carry as a driver depends in large part on the state in which you live, but ranges from $3,000 to $50,000 in the states that require it. The states that require PIP and the amounts that they require include:
- Delaware: $15,000
- Florida: $10,000
- Hawaii: $10,000
- Kansas: $4,500
- Massachusetts: $8,000
- Michigan: Requirements vary
- Minnesota: $40,000
- New Jersey: $15,000
- New York: $50,000
- North Dakota: $30,000
- Oregon: $15,000
- Pennsylvania: $5,000
- Utah: $3,000
What Does No-Fault Medical Coverage Pay For?
No-fault medical coverage pays for a variety of things. Most importantly, it pays for your reasonably necessary medical care and any treatment involved in that care. This includes such things as your stay in a hospital, surgeries, procedures, testing, and rehabilitation.
Your PIP insurance also pays for modifications to your home or vehicle related to your injuries and any medical equipment you need. PIP also covers lost wages, services that you would normally perform yourself, and funeral expenses in extreme cases.
Many states require insurance companies to start paying out for medical expenses suffered in a car accident within a certain time frame, usually 30 days. A delay on your part in reporting any medical bills to your insurance company will usually result in them having more time to pay, which makes it important to report your medical bills to your insurance company as soon as possible.
What Happens if No-Fault Medical Coverage Does Not Cover All Expenses?
In some cases, such as with a severe injury, your no-fault medical coverage might not be enough to cover all of your medical expenses. Fortunately, some states that require PIP insurance offer ways for injured parties to recoup any damages past their coverage amount.
In many cases, states will allow the injured party to sue if their medical expenses go over a certain “severe injury” threshold. Unfortunately, the state laws that do allow injured drivers to sue for excess damages do not allow injured drivers to recover any pain and suffering damages from the at-fault driver.
An injured driver can also use their personal health insurance plan to help pay for injuries, though this is subject to all of the attendant deductibles, coinsurance, and copays. In either case, an injured driver should consider getting legal representation to ensure that their interests are represented following a car accident.