that covers medical expenses and lost wages associated with a car accident.
Personal injury protection is no-fault auto insurance that covers medical costs, lost wages, and replacement services after a car accident.
PIP is mandatory in 12 no-fault states and optional in seven other states.
PIP covers both the driver and their passengers, even if they don’t have health insurance.
You can have MedPay and PIP on your auto insurance policy, but PIP offers a broader range of coverage.
What is personal injury protection (PIP)?
Personal injury protection, or PIP, pays for medical bills, rehabilitation, lost wages, replacement services, and funeral expenses for policyholders, family members, and passengers
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.
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.
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.
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.
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.
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
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?
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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?
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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?
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Personal injury protection is a type of automobile insurance that covers healthcare costs associated with a car accident.
What is the purpose of PIP?
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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.