PIP insurance works by compensating drivers up to a given limit for medical bills, rehabilitation costs, funeral costs, lost wages, and other car accident costs. PIP insurance is meant to simplify claims by requiring drivers involved in an accident to file with their own insurer, instead of establishing fault in court.
Examples of How PIP Insurance Works
New York: PIP is required in New York, and drivers must have at least $50,000 in coverage. This includes coverage for medical bills, as well as a $2,000 death benefit for family members of someone killed in a car accident. PIP will also cover up to 80% of a victim’s lost income if they are unable to work (up to $2,000) and will provide a $25 daily payment to cover routine activities like housework.
Florida: Drivers in Florida must have at least $10,000 of PIP coverage. This means your medical expenses are covered up to $10,000, or 80% of the total bill, whichever comes first. This coverage includes a $5,000 death benefit and a payment for 60% of lost wages, up to $10,000.
PIP insurance is only required in 12 states, but you can purchase it as an add-on in other states as well. It may be useful to purchase PIP coverage even if it isn’t required since it is relatively inexpensive and will help cover your medical expenses.
If you are in the market for PIP insurance, check out WalletHub’s guide to the best PIP insurance companies.
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