What Is Personal Injury Protection?

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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.

Do you really 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 of your questions about the value of personal injury protection insurance plans.

What is Personal Injury Protection?

personal injury protectionPersonal 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.

PIP will kick into effect regardless of fault.

PIP coverage is often required in “no fault” states because it pays for your injuries first, regardless of which driver is ultimately found to be responsible for the accident. In fact, 15 states in America require some level of personal injury protection on all insurance plans. 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 the costs of 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.

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 bill and 60% of your lost wages, up to $10,000.

In other states, PIP coverage varies widely.

Do I Need to Purchase PIP Insurance?

15 states in America require drivers to have PIP insurance at all times.

The 15 states that require PIP insurance include Delaware, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania, Texas, 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.

How Much Does Personal Injury Protection Insurance Cost?

Personal injury protection insurance costs vary widely depending on all of 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 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 healthcare 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 in conjunction with your health insurance policy. For example, if you’re injured in a car accident in Michigan, then 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.


Personal injury protection can provide valuable coverage above and beyond your health insurance policy and your existing car insurance. Compare insurance quotes to determine if PIP is the right choice for you.

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