Personal Injury Protection: What Is It, and Do You Need It?

Personal injury protection (PIP) is a type of auto insurance that some states require drivers to carry. In states where it’s not mandatory, PIP may still be an important coverage to consider for added protection. It helps pay for things like medical costs, lost wages, and other expenses if you or a passenger is hurt in an accident.^[1]

Depending on where you live, PIP may be automatically included in your standard auto insurance policy. But you may be able to opt out. Here’s what you should know about personal injury protection coverage and who might need it.

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Key components of personal injury protection coverage

Personal injury protection covers medical bills and related expenses for you or any passengers after a wreck. PIP also provides coverage if you’re hurt as a passenger in someone else’s car or if you’re hit by a motor vehicle while walking or riding your bike.

PIP can cover the following costs after an accident:

• Medical expenses: If you need medical treatment as a result of an automobile accident, PIP kicks in and covers some costs (minus your deductible).

• Lost wages and income protection: If the accident has rendered you unable to work for a time, PIP can often compensate you for lost wages and ensure you stay afloat.

• Funeral expenses: Should someone pass away in an accident or due to an injury sustained in the accident, PIP covers the expenses for their burial, cremation, and funeral.

• Rehabilitation costs: If an accident requires you to enter physical or occupational therapy to recover, PIP typically covers these costs.

• Care assistance: PIP usually provides coverage for home medical assistance during your recovery from an accident.

• Essential services: If you’re unable to do “essential services” that you’d normally do for your household — like caring for children or cleaning the house — PIP helps cover the costs of hiring someone to provide these services in your place.

Keep in mind that PIP typically covers the above expenses and services regardless of who’s at fault for the accident.

What personal injury protection doesn’t cover

Personal injury protection provides a lot of financial help if you’re in an accident, but it doesn’t cover everything.

PIP typically won’t cover the following:

• Damage to your vehicle or personal property

• Damage to other peoples’ property or vehicle

• Theft

• Medical expenses above your policy’s coverage limits

• Injuries sustained in an accident while committing a crime

• Injuries sustained in an accident while driving for work, like driving for a rideshare

• Injuries to other drivers or parties

• Pain, suffering, and emotional distress

Some policies also have medical payments coverage, known as MedPay. This is typically just for medical expenses, while PIP also covers other expenses like funeral expenses and lost wages.^[2]

The same goes for health insurance, which covers specific medical expenses and services. But it won’t cover things like lost income due to an injury or the cost of child care.

How personal injury protection works

If you have PIP coverage and get injured in an accident, you’ll need to file a claim to get compensated.

Follow these steps:

• 

  1. Contact your insurance company

  They’ll let you know where to start the process, which could be over the phone, on an app, or through the insurer’s website.

• 

  2. File the claim

  You’ll need to provide details about the accident, such as when and where it happened, who was involved, and the nature of your injuries.

• 

  3. Provide documentation

  You might not have all of these at the time of filing, but your insurer will eventually need medical bills, invoices, and receipts for any covered losses. If you’re filing for lost wages, you’ll also need to provide evidence of missed work from your employer.

Stay in touch with your insurance company after filing your claim. They may need more information when investigating your claim and processing your payments. The quicker you respond to these requests, the faster they can compensate you.

The exact timeline for these claims depends on your insurer and state. But insurers typically have a few weeks to respond. For example, in Texas, insurance companies have 15 days to say they received your claim and 15 days to make a claim decision after receiving the required documentation.^[3]

How PIP works with health insurance

Since health insurance is required in the U.S., most people who have PIP coverage also have some sort of health insurance policy on top of that.

How those two policies interact with each other depends on your state and policy terms. Sometimes, PIP covers expenses first, paying for covered losses up to your policy’s limit. After that, health insurance kicks in and covers the remaining expenses, if they’re eligible for coverage. In other states, health insurance covers first, with PIP providing secondary coverage.

In some scenarios, you may only be able to use your PIP to cover the deductible on your health insurance, and your health insurance policy will cover the rest.

If you’re not sure which policy will take precedence if you’re in an accident, talk to your insurance agent. They can walk you through the process in your state.

Who needs personal injury protection?

Personal injury protection can protect you as a driver, but other parties can benefit from this coverage as well. PIP can be helpful for:

• Drivers and vehicle owners: PIP helps if you’re in an accident — no matter who’s at fault — covering costs for both you and any passengers in your car.

• Passengers: PIP also covers you as a passenger when you’re riding in other peoples’ vehicles.

• Pedestrians and cyclists: If a vehicle hits you while you’re riding your bike or walking, PIP coverage kicks in and covers medical costs.

• Other drivers of your car: Sometimes, PIP can cover other people driving your vehicle if they’re in a wreck.

Personal injury protection laws by state

Only some states require personal injury protection coverage. See below for the minimum requirements in each of these states.

How much personal injury protection costs

The cost of PIP depends on many factors, including the coverage amount, the policy limits, the deductible, the number of drivers and vehicles included, and the insurance company you choose. Typically, the more vehicles on the policy, the more you’ll pay for insurance.

Liberty Mutual estimates that PIP typically accounts for about 15%–20% of your total policy premium.^[4]

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How to lower your car insurance rates after adding PIP

If you want to reduce your car insurance premium after adding PIP coverage, here are some ways you can lower your rates:^[5]

• 

  Compare insurance companies

  Premiums can vary quite a bit from one insurer to the next.

• 

  Increase your deductible

  This will mean paying more out of pocket on a claim, but it can save you on your premiums.

• 

  Bundle your insurance policies

  Many insurers will give you a discount for having multiple policy lines with them.

• 

  Boost your credit

  A higher credit score often qualifies you for lower insurance premiums.

• 

  Look for other discounts

  Insurance companies usually have several discounts that help you reduce your costs. You may be able to get one by taking a safe driver class, getting good grades, and more.

You can also ask your employer if it offers group insurance. This can help you save on premiums, too.

Personal injury protection FAQs