Personal injury protection (PIP) is a type of car insurance that covers expenses, like medical bills, legal fees, lost wages, and more, when you are in a car accident, regardless of fault. PIP insurance, also known as “no fault” insurance, is required mostly in states with no-fault insurance laws.
Key Things to Know About Personal Injury Protection (PIP)
- PIP auto insurance is required in 13 states.
- 29 states, including California and Illinois, do not offer PIP coverage.
- PIP covers medical expenses, funeral expenses, lost income, child care expenses, survivors’ loss benefits, and household services.
- PIP does not cover vehicle damage, property damage, or injuries sustained by people outside your car.
- If PIP is available in your state but not required, it is a smart investment if you want additional protection in case of an accident.
What PIP Insurance Covers
Medical expenses
Ambulance services, medical and surgical treatment, hospital stays, nursing, medication, medical supplies, X-rays, rehabilitation, prostheses, dental care, optical treatment and chiropractic services. In some states medical expenses are reimbursed at less than 100 percent, leaving the consumer responsible for up to 20 percent “coinsurance.”
Funeral expenses
This includes funerals, burials, and cremations.
Lost income
If you or your passengers are unable to work due to your injuries, PIP can help recover some of those wages. If you are self-employed and have to hire substitute employees, PIP can sometimes cover some of this cost as well.
Childcare expenses
If your injuries make it impossible to care for your children, PIP can cover childcare expenses, such as babysitters.
Survivors’ Loss
PIP can pay for loss of income and replacement services for surviving dependents.
Household services
PIP can cover lawn care or house cleaning expenses if your injuries make it impossible to perform these duties.
Coverage varies by state and insurance company, and protection beyond medical care is often optional, but PIP insurance can include these types of coverage, up to the policy’s limits and after any deductibles.
What PIP Insurance Does Not Cover
- Damage to your car
- Damage to other people’s property
- Injuries to other drivers involved in an accident
- Injuries from accidents that occur while a covered driver is using their car to make money
- Injuries from accidents that are caused intentionally
- Injuries resulting from accidents that occur while the covered driver is committing a crime, such as fleeing the police
- Injuries that were caused by an uninsured car owned by you or an immediate family member
How PIP Insurance Works
If you live in one of the 13 no-fault states (highlighted in blue on the map below) and a car accident results in minor injuries, each party's medical expenses are covered by his or her own PIP insurance. There is no need to determine who caused the accident to get coverage, you only have to deal with your own insurance company, and you are not permitted to sue the other driver for compensation for your injuries unless they are severe.
The alternative to “no fault” insurance laws is a “tort” system for paying claims for medical injuries. In these states, there are no restrictions on the right to sue. The at-fault driver – and that driver’s insurance – is responsible for compensating everyone injured in the accident.
Three tort states (highlighted in green on the map below) require all drivers to carry PIP insurance, and PIP insurance is available as an option in many other states. In the case of an accident in a tort state, PIP insurance provides immediate benefits to injured people in your vehicle, but collecting from your PIP policy does not limit anyone’s right to sue the at-fault driver for damages.
PIP Requirements by State
Thirteen states, shown on the map below, require all drivers to carry at least a minimum amount of PIP insurance.
PIP Insurance Requirements by State
| State | Minimum Coverage Required |
|---|---|
| Delaware | $15,000 per person $30,000 per accident $5,000 funeral expenses |
| Florida | $10,000 per person |
| Hawaii | $10,000 per person |
| Kansas | $4,500 per person for medical expenses $4,500 for rehab expenses $2,000 funeral expenses $900 per month for disability/loss of income $25 per day for in-home expenses |
| Massachusetts | $8,000 per person |
| Michigan | $250,000 per accident* |
| Minnesota | $20,000 for medical expenses $20,000 for loss of income |
| New Jersey | $15,000 per person Up to $250,000 for severe/permanent injury |
| New York | $50,000 per person $2,000 death benefit 80% of lost income up to $2,000/month $25 per day for services |
| North Dakota | $30,000 per person |
| Oregon | $15,000 per person |
| Pennsylvania | $5,000 per accident* |
| Utah | $3,000 per person $1,500 per person funeral expenses $3,000 death benefit $250 per week or 85% of lost income (whichever is less) $20 per day for services |
As of June 2021
*Michigan drivers enrolled in Medicare or Medicaid may qualify for lower limits
In addition to the states where PIP is mandatory, seven states and the District of Columbia require insurers to offer PIP but allow drivers to reject the coverage. Specifically, PIP is optional in Arkansas, Kentucky, Maryland, South Dakota, Texas, Virginia, and Washington.
Do You Need PIP Insurance?
You need PIP insurance if you live in one of the 13 states where PIP coverage is required. Even if it is not required, buying PIP or MedPay insurance is good idea.
Think about what would happen if you were involved in an accident. If passengers in your car are injured, how would they get medical care? You may have health insurance for yourself and your family, but that won’t cover any other passengers. You may be able to collect from the other driver’s bodily injury liability coverage, but litigation may delay payments for several months. Keep in mind, too, that PIP can cover non-medical expenses.
As you evaluate your insurance needs, compare PIP coverage to medical payments (MedPay) insurance, if both are available in your state. MedPay, like PIP, covers medical bills without regard to fault. However, MedPay only covers medical expenses, so it can’t help with other costs like income loss or child care expenses.
MedPay’s biggest advantage is that it never makes the consumer pay deductibles or coinsurance for medical care, and it can pay for the deductibles, coinsurance and copays of other types of insurance – including your PIP coverage.
The chart below illustrates the similarities and differences between these two types of insurance.
Ask The Experts
To gain more insight about Personal Injury Protection (PIP), WalletHub posed the following questions to a panel of experts. Click on the experts below to view their bios and answers.
1. What are the benefits of having personal injury protection (PIP)?
2. When should drivers get more than the minimum amount of PIP coverage?
3. Should drivers get PIP insurance even if it is not required in their state?
4. Is PIP or MedPay better for drivers?
Ask the Experts
- Abhishek Varma
Ph.D., Associate Professor, Dixie L. Mills Faculty Scholar in Finance, Department of Finance, Insurance and Law, College of Business, Illinois State University
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