What Is Personal Injury Protection?

Last Updated on December 26, 2022

Personal injury protection, or PIP, is an insurance policy that covers medical bills for you and your passengers in the event of a vehicle accident. It can also cover lost wages, childcare, funeral expenses, and long-term rehabilitation. PIP is a required type of coverage for drivers in 16 states. In all other states, PIP is either optional or unavailable.

Do you need personal injury protection? Is it worth it? Should you buy PIP if you already have health insurance? Are you legally required to purchase PIP? Today, we’re answering all your questions about the value of personal injury protection insurance plans.

Personal Injury Protection Explained

Personpersonal injury protection explainedal injury protection, also known as PIP, is the part of your car insurance policy that covers medical expenses and work loss for you and your passengers after a car accident.

Personal injury protection will kick into effect regardless of fault. Because of this, PIP is also known as “no-fault insurance.”

PIP coverage is required in “no-fault” states because it pays for your injuries first, regardless of which driver is ultimately responsible for the accident. Sixteen states in America require personal injury protection on all insurance plans. This includes the 12 no-fault states of Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah. It also includes the states of Delaware, Maine, Maryland, and Oregon. In other states, PIP is optional.

Should You Pay for Personal Injury Protection?

Typically, PIP is ideal for those who meet the following two characteristics:

  • You drive around with lots of passengers in your vehicle, including passengers who could hold you responsible for their injuries in an accident
  • You don’t have a great health insurance plan

One of the drawbacks of PIP is that it’s far less useful if you already have good health insurance in the United States. That’s because your healthcare costs might already be covered by your healthcare plan after an accident – regardless of fault – which would diminish the value of PIP.

What’s Covered by Personal Injury Protection Insurance?

Personal injury protection covers medical expenses resulting from a vehicle accident, regardless of which driver is at fault. Even if you’re determined to be at fault for the accident, medical expenses for you and your passengers will be covered up to your policy’s limit.

You can expect PIP to cover many of the same things as health insurance, including medical and surgical treatment, ambulance fees, medication, and other general medical expenses. These costs will be equally covered for passengers and the driver – nobody in the vehicle receives special coverage.

PIP can also be used to recover lost wages – say, if you miss work because of injuries sustained in a vehicle accident. Some personal injury protection plans will also cover the costs of rehabilitation and therapy.

PIP is also confused with another type of auto insurance – medical payments coverage (MedPay). PIP and MedPay work similarly in that they pay for the medical bills of you and your passengers if you are injured in an auto accident. MedPay, however, is a less comprehensive type of coverage than PIP. While PIP can cover more things like lost wages, injury rehab, and childcare, MedPay usually does not.

How Much Does Personal Injury Protection Cover?

PIP coverage benefits vary depending on your state. In Florida, for example, PIP insurance will cover 80% of your medical bills and 60% of your lost wages, up to $10,000.

In other states, PIP coverage varies widely.

Do I Need to Purchase PIP Insurance?

Personal injury protection is either optional or unavailable in most states. Sixteen states in America, however, require drivers to have PIP insurance at all times.

The 16 states that require PIP insurance include Delaware, Florida, Hawaii, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania, and Utah.

PIP is also required in Washington, D.C., and Puerto Rico.

In all unlisted states, PIP is optional. You’re not required to have PIP on your vehicle insurance policy.

View the minimum PIP requirements for the 16 states it is required below:

StateMinimum PIP Coverage RequiredNo-Fault State?
Delaware$15,000 per person
Maine$2,000 per personNo
Massachusetts$8,000 per personYes
Minnesota$20,000 for medical expenses
$20,000 for non-medical expenses
New Jersey$15,000Yes
New York$50,000Yes
North Dakota$30,000 per personYes
Oregon$15,000 per personNo
Pennsylvania$5,000 per personYes
Utah$3,000 per personYes

How Much Does Personal Injury Protection Insurance Cost?

Personal injury protection insurance costs vary widely depending on all the factors you would expect – like driver demographics, the vehicle’s age, and your history of claims. Compare insurance quotes in your area to check how much personal injury protection could cost you.

In general, PIP will raise the cost of your insurance policy by 5% to 15% when purchasing $1,000 to $10,000 of PIP coverage. If you spend $600 on insurance each year, for example, then approximately $50 to $75 of it might go to PIP.

I Already Have Health Insurance. Do I Need Personal Injury Protection?

If you already have health insurance, then personal injury protection is likely redundant. The two insurance policies mostly cover the same things.

However, personal injury protection may still be very useful, even for those with good health insurance. Personal injury protection covers additional expenses like deductibles, dental treatments, and funeral bills, for example. It can also cover medical expenses for other people in the vehicle – something your health insurance typically does not cover.

Another unique advantage of PIP is that PIP coverage is a non-taxable payment. You don’t have to pay taxes on PIP payments. Short-term and long-term disability policies are taxable.

It’s also important to note that certain states – like New Jersey and Michigan – have provisions that ensure your PIP coverage will work with your health insurance policy. For example, suppose you’re injured in a car accident in Michigan. Your health insurance policy may cover your physical injuries, while PIP is responsible for your economic losses – like lost wages. Through this system, you can maximize policy coverage and maximize your compensation.

Final Word on Personal Injury Protection

Personal injury protection covers your medical bills if you are injured in an accident. It also covers the medical bills of your passengers if they are injured in an accident when you are driving. It also can pay for things like lost wages, childcare, and injury rehab.

Personal injury protection can provide valuable coverage above and beyond your health insurance policy and your existing car insurance. If PIP is not required in your state, you can still add-it on to your existing car insurance policy. Compare insurance quotes to determine if PIP is the right choice for you.

James Shaffer
James Shaffer James Shaffer is a writer for InsurancePanda.com and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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