PIP insurance may need to be paid back in states that follow the tort system for car insurance. So-called at-fault states require the person who causes an accident to bear the burden of the costs, which sometimes requires repaying your own insurance company for PIP coverage. In at-fault states, your own PIP coverage pays for medical expenses when the accident first occurs. Once the party that caused the accident is determined, they are responsible for reimbursing the expenses of everyone involved, potentially including the insurance company.
For example, if you are involved in an accident and found to be not at fault, your own PIP coverage will initially pay for your medical expenses. Then, the other driver would need to reimburse you. Once you receive the reimbursement, you pay back your own insurance company the initial payment you received. That way, you won’t be receiving money twice. If you’re found to be at-fault, your insurance coverage will pay for your own medical expenses, as well as any medical expenses incurred by the other driver or their insurance company. In that case, you don’t have to pay back your insurance company.
Drivers in other states do not have to pay back PIP because their states have no-fault auto insurance laws. In no-fault states, each party’s medical expenses are covered by their own PIP insurance if a car accident results in minor injuries. There is no need to determine who caused the accident, and you are not allowed to sue the other driver for compensation unless your injuries are severe. You only have to deal with your own insurance provider, which means repayment isn’t necessary.
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