How Does Personal Injury Protection Insurance Work?
Personal injury protection (PIP) insurance can be a lifeline for you and your passengers. If you have suffered an accident, regardless of who caused it, PIP insurance covers health care expenses as well as lost wages and essential services. When you need support most, your PIP insurance offers immediate financial relief. Though typically an optional automobile insurance, PIP may be just what you need to recover during this difficult time, without added financial stress.
How does personal injury insurance work? In this article, we’ll detail what PIP is and how it works. Keep reading to explore the differences between PIP and liability insurance, while discovering the many benefits you can expect from your PIP coverage.
What Is Personal Injury Protection (PIP) Insurance?
Personal injury protection insurance is a type of no-fault automobile insurance, offering coverage for healthcare expenses, lost wages, and essential services associated with a car accident. Regardless of who is at fault for the car accident, you and your passengers can have the cost of your medical expenses covered (up to a set limit) even if the injured parties lack health insurance. This is great news for anyone needing immediate care. Treat your injuries now and receive financial relief without waiting for insurance companies to process your claim or determine who is at fault.
How does personal injury insurance work? You will typically receive your PIP insurance payments before your health insurance. If your expenses exceed your coverage limit, then your health insurance steps in to cover the remaining costs. PIP commonly allows you to choose your own medical provider, giving you the freedom of choice. To begin the claims process, contact your insurance provider and file a claim form. Remember to keep detailed records and file promptly.
Is PIP Insurance Required?
Unlike liability insurance, PIP is not required in every state. While it is optional for most states, it’s important to note that it is mandatory in some states. If you live in certain states, such as Oregon, Hawaii, New York, or Utah, you are required to have PIP insurance. Make sure to verify whether PIP is mandatory for your state or not. If it is not required, PIP insurance may still be an ideal solution for you and your family, providing comprehensive coverage and the peace of mind that comes with it.
Keep in mind, PIP insurance does set limits for the maximum amount your policy can pay for accident-related costs. If your medical bills exceed this limit, and you have health insurance, your health insurance may cover the remaining balance. There is also a cap per person. If multiple people were injured in the auto accident, these caps limit the coverage per person. For instance, if your policy’s limit is $10,000, then this amount is applied to each person rather than the sum total of the accident. Each person can claim up to that amount.
What Does PIP Insurance Cover?
PIP can provide quick financial relief for several accident-related expenses. It pays for three main categories: medical bills, lost wages, and essential services.
PIP will cover (up to a set limit) medical expenses for reasonable and necessary treatments. These can include, but are not limited to, doctors’ visits, ambulance rides, hospital stays, emergency care, surgery, dental or optical care, physical or occupational therapy, and prescriptions.
Personal injury protection insurance can also cover lost wages, replacing a portion of your income if your injury prohibits you from working. PIP coverage amounts vary by state; the percentage reimbursed is state-specific. If you live in Oregon, for instance, Oregon PIP covers 70 percent of lost income up to $3,000 monthly for one year. To find your state’s limits, check your state’s Department of Motor Vehicles (DMV) or with your auto insurance agent.
If the injuries you (or your passengers) sustained prevent you from doing necessary chores, your PIP insurance can also cover essential services. Essential services are any household tasks you cannot perform due to injury. This can include childcare as well as housekeeping tasks, such as cleaning, yard work, laundry, or cooking. Your PIP can help cover the cost of hiring someone to perform these essential services.
Keep in mind, PIP does not cover property damage, but it can cover funeral costs if the accident results in death.
Who Does PIP Insurance Cover?
PIP insurance is a no-fault automobile insurance. Regardless of who caused the accident, you are covered. This protection includes the policyholder, but also extends to family members in the household, passengers in the insured vehicle, and any cyclists or pedestrians who were hit by the insured vehicle.
It’s important to note that PIP coverage only extends to motorcyclists if they have also purchased PIP insurance separately. Most states do not require PIP insurance for motorcyclists, but your auto insurance agent can include it as an add-on.
What Are the Primary Differences Between PIP and Liability Insurance?
If you caused the accident, liability insurance only covers the medical costs for the third party. If you, as the policyholder, are determined to be at fault, it will not cover your personal medical expenses. Conversely, PIP insurance can cover your personal medical costs, as well as any injured passengers in your vehicle, even if you are determined to be at fault.
Other notable differences center around property damage and required coverage. PIP does not cover property damage and is an optional coverage in most states. Liability insurance does cover property damage to a third-party (if the policyholder is at-fault) but does not extend to the property of the at-fault policyholder. It is also mandatory insurance in all states.
How Can I Benefit from PIP Insurance?
In addition to the many benefits detailed above, PIP insurance can expedite the entire process so you don’t have to wait to receive payments for your medical care, lost wages, funeral expenses, or essential services. Since fault does not have to be determined to receive financial care, PIP insurance simplifies the claims process. This results in faster claims processing and immediate financial support after injury. Get the care you need without financial burden.
When Is PIP Insurance Not Enough?
While PIP insurance can be a powerful asset in protecting you and your family in case of an accident, it may not always be enough. Insurance companies often work to minimize the amount you receive. For the most comprehensive solution, consider partnering with an experienced personal injury attorney. They will represent your best interests and work to help you receive fair compensation after an accident.
If you have been in an accident and feel you are entitled to compensation, contact our expert team at Warren Allen LLP. We will help you find the best resolution possible through sound legal advice and expert representation. Have more questions? Contact us today and learn what your options are.
