Q. What is Personal Injury Protection coverage?
A. Your auto policy's Personal Injury Protection coverage, commonly referred to by its acronym "PIP," is a valuable coverage protecting you and your passengers who sustain auto-accident injuries. That may sound pretty straightforward, but I field lots of inquiries about this coverage.
When considering whether or not to carry PIP coverage, I find it's often compared to health insurance. But while both PIP and health insurance will cover medical bills, there are important differences that make PIP a valuable contribution to your auto insurance protection even if you have great health insurance.
Let's look at the primary and most important benefit: medical coverage. PIP will pay for medical expenses that are necessary and reasonable, without subject to a deductible or co-pays. If you suffer injuries in a crash, a wide variety of medical expenses may arise – a trip to the emergency room, a visit to your family doctor, prescriptions. Less obvious expenses could be an ambulance ride or Life Flight helicopter airlift from a remote location. Even with good medical coverage, you likely have co-pays for hospital and doctor visits, plus the cost to fill any prescriptions. Annual deductibles and cost-sharing also are common, as are limitations on the number of trips to a chiropractor or massage therapist. Some services and procedures may not be covered at all!
The next benefit is something not likely covered by health insurance: loss of income. PIP provides you with loss of income benefits if you're unable to work because of auto-accident injuries. If you have disability insurance, it probably will provide some replacement income, though it may come with a long waiting period or a limited duration of benefits. What I like about this benefit is that it's provided outside of your PIP coverage limit, meaning the cost to treat your injuries won't drain the amount available to replace lost income.
The final protection is also something you won't find in a health insurance plan: necessary services. Think about what you must do each day to keep your household in order, such as cooking, cleaning, laundry, or child care. Those tasks can't wait until you recover from your injuries, and hiring someone to do those things on your behalf could create a financial hardship. But PIP can help until you're back in action. As with loss of income, the necessary-services benefit also is provided outside of your PIP coverage limit.
I cannot overstate the importance of PIP being a "per person" and "no fault" coverage. Even if you feel your health insurance, disability insurance, and other forms of protection will be sufficient to keep you in the black, what about your passengers? And even if someone else is at fault for the accident, how long might it take for their insurance company to settle with you or your passengers for medical costs? With PIP coverage, you'll enjoy peace of mind knowing that everyone in your car is protected.
I hope I've given you helpful information to weigh your coverage options. After a car crash, the last thing you and your passengers want is additional hassle and unexpected bills!