PIP – What Is It and Why Should I Buy It?
Written by: Twin City Group
Personal Injury Protection (PIP) insurance is a form of first-party coverage, similar to Medical Payments, that is available in most states, but mandatory in 15 states. States that are considered “no-fault” states will require PIP along with either bodily injury liability, property damage liability, or both. The purpose of PIP is to provide medical coverage to the named insured(s) in the event of an accident no matter who is at-fault. The intent was to reduce the abundance of auto accident related lawsuits in the courts.
Depending on the state you live in, PIP insurance will pay for the following expenses after an accident:
- Medical Expenses – Up to the limit you purchase minus a deductible you select.
- Lost Wages – Typically up to a percentage of the medical benefit less any selected deductible.
- Funeral Expenses – Generally a flat amount depending on your state.
- Household Services – Services such as transportation costs or home maintenance depending on the limits in your state.
Although PIP varies by state, it typically covers the named insured (you), your children, and other members of your household that are related to you. Your PIP will also cover passengers in your vehicle if they do not own a vehicle or have their own PIP. People riding in your car who already have their own PIP are covered under their own policy. Your PIP will also cover your child while they are riding a school bus. Your PIP coverage is portable because it will cover you while you are in another driver’s vehicle, riding a bicycle, or as a pedestrian. In Florida, for example, the minimum PIP coverage is $10,000 but can be extended to higher limits if you pay an additional premium. To find the limits available in your state, you can easily use your preferred Internet search engine, and simply type in PIP Coverage – (Your State).
Why Should I Buy It?
The simple answer here is if you live in a PIP required state, you don’t have a choice in the matter. But, if you live in a state where it’s optional, there are some considerations to make. For example, the medical expense coverage in PIP is redundant if you elect to purchase medical payments or have health insurance or Medicare. All of these coverages would pay your medical expenses after an accident, so why would you purchase the duplicate coverage?
Your medical payments, health insurance, or Medicare does not, however, pay for lost wages, so you may want to consider PIP. There is an issue here as well. The lost wages benefit in your PIP is subject to the total benefit. This means that if your medical expenses are $10,000, and your limit is $10,000, you would not have any money available for lost wages. Therefore, if you are concerned about lost wages, and you find that PIP is a pricey coverage in your state, you might be better off using that money for an accident plan that would pay you a lump-sum benefit that you could use against your lost wages.
PIP insurance can be confusing to most consumers. If you aren’t required to carry it, and you’re concerned about paying for duplicate coverages, contact the experts at Twin City Group, a 100-year-old insurance agency, that have experts you’ll want to speak to about PIP Insurance. Take the time to call Jacob Sheehan at (952) 924-6968 and get the expert advice you need to navigate the Personal Auto policy and make an informed decision.