Personal injury protection, or PIP, pays for medical bills, rehabilitation, lost wages, replacement services, and funeral expenses for policyholders, family members, and passengers

after a car accident

PIP is also known as "no-fault insurance" because coverage is guaranteed no matter who caused the injury. It’s a requirement for drivers in no-fault states, but it’s available in some at-fault states as well.

What does personal injury protection cover?

The primary purpose of personal injury protection insurance is to cover the cost of medical care for you and your passengers or household members after a motor vehicle accident.

Your PIP insurance coverage will cover hospital bills and accident-related medical treatment, including the cost of ongoing rehabilitation, up to your policy limits.

On top of medical costs, PIP covers other things you might need as a result of the accident:

Lost wages

Replacement services for things you can no long do due to your injury, such as childcare and house cleaning

Death benefits and funeral expenses

Coverage levels vary by state. It could be as low as $3,000 or as high as unlimited coverage.

What isn’t covered by PIP?

PIP insurance usually does not cover the following:

Injuries sustained by the other driver and their passengers

Injuries from an accident that occurred while you were driving for work (e.g., driving for a rideshare company like Lyft or Uber)

Injuries from a crime that results in an auto accident

Property damage

Damage to your vehicle

Your state-mandated liability insurance will cover costs associated with any injuries or property damage you cause to other parties, while physical damage insurance like collision coverage can cover your own vehicle repair costs. PIP coverage is only for medical costs.

States where PIP is required

There are 12

no-fault states

and four fault-based states that require PIP coverage so that every driver’s injuries are covered by their own insurance. PIP is also offered in seven additional states and the District of Columbia.

No-fault PIP states:

Florida

Hawaii

Kansas

Kentucky

Massachusetts

Michigan

Minnesota

New Jersey

New York

Pennsylvania

North Dakota

Utah

Choice no-fault states: In three no-fault states, you can opt out of mandatory PIP coverage. Kentucky allows drivers to reject PIP coverage in writing, while New Jersey and Pennsylvania offer slightly different minimum coverage plans for drivers who don’t want PIP.

Optional PIP states:

Arkansas

District of Columbia

Maryland

New Hampshire

South Dakota

Texas

Virginia

Washington

If you live in one of the states listed above, personal injury protection coverage is available for purchase, but not required by law for any drivers.

If PIP isn’t available in your state:

Medical payments coverage (MedPay)

is the best alternative to PIP in states where personal injury protection isn’t available. While it won’t cover lost wages, MedPay offers similar no-fault coverage for medical expenses and funeral costs.

MORE:

MedPay vs. PIP: Which should you get?

How PIP insurance claims work

The main advantage of personal injury protection is that PIP claims offer quicker coverage for medical costs than

bodily injury liability insurance

If you’re injured in an accident caused by another driver, you can

file a claim

with their liability insurance to cover your hospital bills. However, this can be a time-consuming process, as you’ll have to wait on the at-fault driver’s insurance company to investigate the case and determine your payout.

With PIP, you can find a claim directly with your own insurance company to cover your healthcare costs, up to the PIP limits on your car insurance policy. This process is typically faster.

How much does no-fault insurance cost with PIP?

Your no-fault insurance premiums will depend on

your state’s minimum insurance requirements

and how much coverage you want. It’s also affected by your deductible, or the amount you will have to pay out of pocket before your coverage kicks in.

Here’s a policy breakdown for a 30-year-old driver. Our sample driver has a 25/50/25 policy with $15,000 of PIP. Here’s how that would play out with a few different deductibles, and the percentage of the overall cost that goes toward PIP.

No-Fault Coverage	PIP	Total Price	PIP % of Total
$0 Deductible, $15,000 PIP	$205	$1154	18%
$250 Deductible, $15,000 PIP	$186	$1135	16%
$500 Deductible, $15,000 PIP	$177	$1126	16%
$1,000 Deductible, $15,000 PIP	$171	$1120	15%

Key Takeaway: PIP usually costs approximately 15% to 20% of your total no-fault car insurance expenses.

Do I need PIP if I have health insurance?

In some states, some level of PIP is required even if you have health insurance.

If you need to file a claim, you will max out your PIP coverage first and then apply your health insurance. In other words, PIP can complement health insurance to offer better coverage.

PIP covers things health insurance won’t cover: PIP provides extra benefits that your regular health insurance policy does not, like funeral costs, home cleaning, and reimbursement for lost wages.

MORE:

Can I use health insurance to cover car accident injuries?

How does PIP work with other types of insurance?

PIP is usually the first policy to be drained, if you have it. If costs exceed that limit, then you can move on to other options like the other driver’s liability coverage.

In the event that it’s a very serious accident, you may be able to bypass your coverage level and file a lawsuit against the other party.

Should I get medical payments insurance on top of PIP?

Both policies share the same purpose, which is to cover your medical expenses after a car accident. But each one covers different things so many people choose to purchase both policies. For instance, MedPay doesn’t cover any lost wages, rehabilitation, or childcare (whereas PIP covers these things).

Keep in mind: If you live in a state that requires PIP, then you may not need to get MedPay. For example, Michigan requires insurers to offer unlimited PIP coverage, so medical payments coverage on top would be redundant. However, if your state has a low limit for PIP, then you could get MedPay to supplement that coverage.

If you aren’t sure what coverage is right for you, download the car insurance comparison shopping and broker app

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FAQs

What is PIP and how does it work?

PIP, or personal injury protection, covers medical expenses, lost wages, and funeral costs for you, your passengers, and your family after a car accident. If you’re injured in a car accident, you can file a PIP claim with your insurance company regardless of fault.

What is the difference between PIP and bodily injury?

Bodily injury liability coverage pays for other parties’ medical expenses if you caused injuries during a car accident. PIP, on the other hand, pays for your own medical costs regardless of who was at fault.

What are the benefits of PIP coverage?

PIP coverage offers more direct coverage for accident-related healthcare expenses than filing a claim with the at-fault driver’s liability insurance, and it provides more extensive coverage than health insurance.

What does personal injury protection mean in personal finance?

Personal injury protection is a type of automobile insurance that covers healthcare costs associated with a car accident.

What is the purpose of PIP?

Personal injury protection makes it easier for drivers to file claims for injuries sustained in a car accident without going through a liability claim process or relying on uninsured motorist coverage.

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