Personal Injury Protection: How PIP insurance works

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Written by Margaret Wack Edited by Nick Versaw

Updated March 2, 2023

Personal injury protection, aka PIP coverage, is a type of auto insurance that can help cover certain costs if you get into an accident. PIP insurance can pay your medical bills, no matter who was at fault in an accident, as well as cover your lost wages. Sometimes, it even covers other expenses, such as household help or child care. 

In this article, we’ll cover how PIP works, when it’s required, and how much coverage you need. Is it time to add personal injury protection to your car insurance? Enter your ZIP code below to start searching for policies.

How Does Personal Injury Protection Work?

How PIP insurance works depends on whether you live in a no-fault insurance state or an at-fault state. In a no-fault state, all drivers are required to carry PIP coverage. After an accident, you must file a claim with your own auto insurance company, whether it was your fault or the other driver’s. Your PIP insurance will pay for minor injuries, lost wages, and certain other damages. If the cost of your injuries exceeds your PIP limits, then you may be able to sue the at-fault driver for the extra expenses (depending on your state’s laws).

In an at-fault state, PIP auto insurance will generally kick in when you’re at fault in an auto accident and you or your passenger(s) are hurt. Your PIP coverage may pay for your health insurance deductible, medical costs that aren’t covered by health insurance, lost income, and other damages.

What Does PIP Insurance Cover?

Depending on your state, personal injury protection covers the following:

• A percentage of your medical bills, up to your policy limits
• A percentage of your lost wages, up to your policy limits
• Mileage to go to medical appointments
• In-home services you need because of your injuries, such as housekeeping or childcare

PIP insurance can also protect you, in some cases, if you’re hurt by a car when you’re a pedestrian or bicyclist. PIP covers other members of your household if they’re involved in an accident. In a worst-case scenario, PIP insurance may even cover your funeral costs or pay a death benefit to your survivors.

What Isn’t Covered by PIP Insurance?

PIP insurance does not cover the following:

• The other driver’s medical bills: If you’re at fault, your bodily injury liability covers that.
• Damages to the other driver’s vehicle: Your property damage liability covers that if you’re at fault.
• Damages to buildings, fences, or other property: That, too, would be covered by property damage liability coverage.
• Damages to your vehicle: Your collision/comprehensive coverage covers that.
• Pain and suffering or other damages: Liability insurance would cover that.

How to File a PIP Claim

In order to get your PIP policy to pay out, you’ll need to meet specific requirements. Florida, for instance, requires you to see a PIP medical provider within 14 days of the accident. That provider will determine if you have a serious emergency medical condition.

If you’re diagnosed with a serious medical condition, you can be eligible for PIP benefits up to $10,000, but if not, then your benefits are limited to $2,500. Your insurance company doesn’t have to pay the claim if you don’t see a doctor within 14 days. If you’re filing a PIP claim for lost wages, your employer must fill out a form verifying your earnings for the past 13 weeks.

What is the Difference Between PIP and Medical Payments Coverage?

Both personal injury protection coverage (PIP) and medical payments coverage (MedPay) cover medical bills after a car accident with another motorist, no matter who’s at fault. So what’s the difference between them? And do you really need both? Here’s a quick comparison:

• MedPay has no deductible or copay. PIP often has a deductible.
• MedPay is optional in most states and only required in two states. PIP is standard or required in 17 states and Puerto Rico.
• MedPay, true to its name, only pays for medical expenses. PIP can pay for other losses, too, like lost wages or rehabilitation expenses.
• MedPay usually has a limit of $10,000 or less. The minimum limit for PIP varies dramatically by state, up to a high of $50,000 per person in New York (or unlimited in Michigan).

You probably don’t need both types of coverage unless your PIP max limits are low and you want to make sure you’re protected.

Is Personal Injury Protection Auto Insurance Necessary?

If you live in one of the states where PIP coverage is required, you’ll have to buy it. But if you don’t, how do you decide if PIP is necessary? Some factors that may influence your decision to purchase PIP coverage include your health insurance, your financial situation, and your family members.

If You Have Inadequate Health Insurance Coverage

When deciding whether or not you should purchase PIP insurance, you should take a hard look at your health insurance. Do you have a plan with high deductibles, pricey copays, or generally stingy coverage? Then PIP can be a big help in case you end up with a lot of accident-related medical bills. 

Some states have a system where your PIP and health insurance coverage work together to cover your bills. In New Jersey, for instance, you can choose PIP as your primary coverage and then let health insurance cover the remaining costs.

If Your Financial Situation is Uncertain

You should also consider your financial situation. Do you work a job without paid sick leave or short-term disability coverage? Do you live paycheck to paycheck? If so, PIP may be necessary to replace your lost wages.

If You Have Family Members Who Need Coverage

You should also consider your family members when deciding whether or not to purchase PIP coverage. Because car insurance with personal injury protection can cover the policyholder and your whole household, it may be a smart buy if you have kids. 

It’s also good protection if anyone in your family doesn’t have health insurance or if you or family members often get around by bike.

What States Require PIP Insurance?

All true no-fault states require drivers to carry PIP insurance as a part of their car insurance policy. But a few tort states (that means states where you can easily sue at-fault drivers) also have mandatory PIP insurance, although some let you opt out if you do it in writing. 

According to the Insurance Information Institute, these PIP states (and Puerto Rico) require the coverage or require insurers to offer it. States with an * only require insurers to offer PIP, and you may opt out:

• Arkansas*
• Delaware
• Florida
• Hawaii
• Kansas
• Kentucky
• Maryland*
• Massachusetts
• Michigan
• Minnesota
• New Jersey
• New York
• North Dakota
• Oregon
• Pennsylvania
• Puerto Rico
• Texas*
• Utah
• Washington*

Finding the Right Car Insurance Coverage

PIP insurance is like many other aspects of your auto insurance policy; you may only fully appreciate it once you need it. But if you’re involved in an accident that causes more severe injuries, PIP can help you and others focus on recovery and not stress about finances.

If you’re looking for a new car insurance policy and are interested in PIP coverage, it’s a good idea to shop around to make sure you’re getting the best deal possible. It’s quick and easy to compare different car insurance policies using Compare.com. Just enter a few details about yourself and your vehicle, and receive free, personalized car insurance quotes in just a few minutes.

Margaret Wack Insurance Writer

Margaret Wack is an auto insurance writer for Compare.com. She has written about insurance and personal finance for brands and publications including Investopedia, Bankrate, MoneyGeek, The Insurance Bulletin, and more. Margaret earned a bachelor's degree in classics, comparative literature, and poetry from Smith College and an interdisciplinary master's degree from St. John's College.