What is personal injury protection (PIP) insurance?

Personal injury protection can cover the costs if you or your passengers are hurt in a car accident, regardless of who was at fault.

Updated|5 min read

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Personal injury protection, or PIP, is a type of car insurance that covers the costs if you or your passengers are injured in an accident. Also called no-fault car insurance or first party benefits coverage, PIP coverage can pay for medical expenses, lost wages, services like child care, and even funeral expenses.

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However, personal injury protection may be less important than other types of car insurance because it covers some of the same things as health insurance and disability insurance. You may be able to save on your auto insurance premiums by reducing your PIP insurance to your state’s legal minimum as long as you still have the coverage you need from other types of insurance.

What is personal injury protection?

When you’re hurt in an accident, personal injury protection pays for your medical expenses, regardless of who was at fault. It even covers passengers and other drivers insured by your policy. The expenses have to be related to the injury, though, which means that property damage won’t be covered by PIP.

PIP insurance is required in no-fault states, where drivers have to seek reimbursement for their injuries from their own car insurance company, even if someone else was at fault in the accident. In at-fault states, medical expenses are covered by the at-fault driver’s liability coverage, but in no-fault states, you need PIP to cover your injuries.

You don’t have to be injured while driving in order to use your PIP coverage. PIP will also cover your injuries and related expenses if you’re hit by a car while walking or riding your bike.

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As with all types of car insurance, your PIP coverage has a limit, meaning the maximum amount your insurance company will pay you. Once your carrier has paid up to your PIP insurance limit, you’ll have to pay any excess costs out of pocket. You can increase your PIP coverage limit for a higher premium. The amount you purchase in PIP coverage, and how much you pay for it, will be listed on your policy’s declarations sheet.

What does personal injury protection cover?

As we mentioned above, personal injury protection can pay for medical expenses, lost wages, death benefits, and even funeral expenses if you or your passengers are hurt in a car accident. Here’s a closer look at what that means:

1. Medical bills

Personal injury protection covers medical bills for you, your passengers, and anyone else listed on your policy. However, PIP won’t cover expenses paid for by health insurance. Your coverage extends to you even if you’re not driving at the time of the injury, like if you get hit by a car while walking. Covered medical expenses may include:

  • Surgery, nursing, emergency care, X-rays, prescriptions, dental care, and prosthetic devices

  • Therapy, rehabilitation, and remedial care

  • Psychiatric and psychological care

  • Optometry services

  • Speech and audiological services

  • Ambulances

  • Non-medical care in accordance with your religious beliefs

2. Lost wages

If you can’t work as a result of an injury from a car accident, PIP insurance can replace some of your lost wages. However, not every insurer offers this part of PIP insurance, and it may cost extra to add to your base car insurance policy.

Although every insurer offers different terms, the amount you’re allowed to claim in lost wages may be limited by your policy. Insurers usually pay up to 80% of your lost wages, up to a specified limit. If you have a deductible, your deductible amount will also be taken out of your reimbursement. Depending on state law, you may be reimbursed for less based on any social benefits you receive, such as worker’s compensation or Social Security disability insurance.

It’s important to note that if you're out of work after a car accident, a disability insurance policy will typically offer better coverage for lost wages than your PIP coverage, so it’s likely worth investing in disability insurance in addition to car insurance.

3. Death benefit

Personal injury protection coverage may pay out a small sum, called a death benefit, to the survivors of someone killed in a car accident. The amount is usually limited to a dollar amount or the remainder of any unused PIP benefits.

However, if you already have life insurance, the death benefit offered by PIP coverage may seem small in comparison. Since life insurance also covers you if you die in a car accident, the PIP provision for death benefits isn’t worth it on its own if you can afford a term life insurance policy.

4. Funeral expenses

As with the death benefit provision, your auto insurance’s PIP coverage may also pay for funeral expenses, but coverage will be limited by the terms of your policy.

Since funerals can be very expensive, the funeral expenses provision of your PIP coverage may not be enough to fully reimburse the costs of a funeral. For that, an affordable term life insurance policy may be a better choice.

5. Essential services

If your injury means you’re unable to perform certain tasks, your PIP coverage may reimburse you for the cost of paying for those services. Essential services can include:

  • Child care

  • Lawn mowing

  • House cleaning

  • Shoveling snow

  • Doing laundry

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Who does PIP insurance cover?

No-fault insurance covers the following people:

  • You, the person insured by the policy, while you're in your car or if you're hit by a car

  • Any of your immediate family members, while in your car or when hit by another car

  • Any passengers injured while in your car 

That means that if your spouse gets hit by someone else or runs into a pole, their medical expenses may be covered by PIP, even if you weren’t in the car at the time.

What’s not covered by PIP insurance?

Personal injury protection coverage covers your medical expenses in most circumstances, but PIP insurance does have one notable exclusion: If you’re injured in a car that isn’t covered by your insurance, you may not be covered at all. 

PIP will cover you when you're driving your own car, when you're hit by someone else as a pedestrian, and as a passenger in someone else's vehicle. But your PIP may not cover you while you’re driving someone else’s car, depending on your state and the specifics of your policy. 

Additionally, property damage is not covered by personal injury protection. If the damage to your car was caused by another driver, then their liability coverage will provide reimbursement. If you caused the damage, or if a force beyond your control caused the damage, your collision or comprehensive coverage will reimburse you.

Which states require PIP insurance?

In a no-fault state, each driver’s insurance covers their own injuries and expenses after a car accident, regardless of who caused it. In an at-fault state, also known as a tort state, the driver who is liable for the damage is responsible for paying for the damage, whether through their car insurance or out of pocket.

In no-fault states, you’re required to have personal injury protection insurance. In at-fault states, PIP insurance may not even be offered at all, or it may be required as an add-on to your liability insurance. This means you can still sue the other party and receive reimbursement for injury expenses from your car insurance company.

In at-fault states that don’t offer PIP coverage, you may still be able to get MedPay coverage, which also covers your injuries after a car accident, regardless of who was at fault. 

No-fault states

StatePIP coverage required
Kansas$4,500 per accident
Massachusetts$8,000 per accident
MichiganAmount varies depending on health insurance
Minnesota$20,000 per accident
New Jersey$15,000 per accident
New York$10,000
North Dakota$30,000
Utah$3,000 per person

At-fault states where personal injury protection is required

StatePIP coverage required
Delaware$15,000 per person, $30,000 per accident

At-fault states where personal injury protection is offered but not required

  • Maryland

  • New Hampshire (car insurance in general is not mandatory in New Hampshire, but fault is assigned when an accident occurs)

  • South Dakota

  • Texas

  • Virginia (car insurance is optional in Virginia if you pay an uninsured motorist fee, but fault will still be assigned in an accident)

  • Washington

  • Wisconsin

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Frequently Asked Questions

What is the difference between PIP and medical payments coverage?

Both PIP and MedPay cover your medical expenses, but PIP usually has much higher coverage limits than MedPay. PIP also takes it a step further by covering lost wages, death benefits, and funeral expenses up to a certain amount. MedPay is available in states where PIP is not, otherwise known as fault states or tort states.

What’s the difference between liability coverage and PIP insurance?

In at-fault states, the at-fault driver's liability coverage is what pays for your injuries if they hit you. In no-fault states, you need your PIP coverage to cover your injuries, even if the other driver was at fault, but the other driver’s liability coverage will still pay for damage to your car.

How much PIP coverage should I have?

Most states that require PIP mandate between $3,000 to $30,000 in PIP coverage. In Michigan, the amount of PIP you need varies based on your health insurance coverage. If you have health insurance and disability insurance, you may not need to increase your PIP limits above the requirements in your state.