What is PIP insurance?

What is PIP insurance?

Personal Injury Protection (PIP) is one of the many types of insurance products that can make up your standard auto insurance package. In many states with "no fault" laws, PIP is a requirement — in fact, you might be reading this because recently moved to one of these states and now you’re thinking, "Gosh darn, another type of auto insurance?"

Yes, PIP is another type of auto insurance, designed specifically to provide payment for medical bills and lost wages caused by a car accident, regardless of who was actually at fault for the accident. Note that PIP only applies to medical-related costs — property damage, either to the other car or to other types of property, is still covered by liability insurance.

PIP doesn’t just provide coverage for medical bills or lost wages due to injury. It can also cover rehabilitation costs and funeral expenses. Basically, anything that would otherwise be covered under bodily injury liability insurance — a type of car insurance in states without no fault laws — is covered under PIP. The only difference is how you’re making the claim.

No matter who’s at fault for the accident, you’ll send a claim to your own PIP provider. If it turns out that the other driver is at fault, your insurance company will deal with talking to their insurance company in the background — you won’t have to do anything. But just because you live in a "no fault" state doesn’t mean your car insurance rates won’t go up if you cause an accident. If you’re at fault, your car insurance company can still jack up your rates to reflect your increased risk as a customer.

One of the major benefits of having PIP insurance instead of bodily injury insurance is that the drivers don’t have to worry about insurance details when making a claim. After the shock of an accident, it can be difficult to deal with wrangling insurance information out of someone or filing lawsuits to get the other insurance company to pay. With PIP, all of that stuff still happens, but you don’t have to deal with it. It also helps free up the courts and saves the state some money.

Not everyone likes PIP insurance. Some people feel that it takes away the right to file a lawsuit. In response to this criticism, every state that requires PIP insurance also has laws that allow drivers to sue each other. You’re welcome.

What are all the states that require PIP insurance? Glad you asked!

  • District of Columbia

  • Florida

  • Hawaii

  • Kansas

  • Kentucky

  • Massachusetts

  • Michigan

  • Minnesota

  • New Jersey

  • New York

  • North Dakota

  • Pennsylvania

  • Utah

PIP insurance is available to buy in every other state, but it is not mandatory. PIP insurance is typically more expensive than typical liability insurance policies. Make sure to shop around for the best price before buying.

Image: Sandro Ferrarese_