What is Personal Injury Protection (PIP) Coverage for in an Auto Insurance Policy?

Published: 23rd April 2010
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Personal Injury Protection is a type of no-fault insurance that generally forms part of an auto insurance policy. It covers the cost of medical treatment resulting from a car accident regardless of who is at fault. This coverage extends to the insured person and their family as well as any unrelated passengers that may be travelling in the car at the time of the accident. It will also cover the policy holder in the event they are involved in a car accident as a pedestrian or cyclist. PIP is legislated in most states across the U.S. as being a compulsory component of auto insurance. In the few states in which it is not legislated, a vast majority of people still opt to take out PIP insurance. Here are some of the reasons why:

Extended Insurance Coverage With PIP

Depending on the type of policy that you take out, your PIP insurance may extend to cover lost income. Your lost income could result from your inability to work while recovering from your injuries. Most people who have a salaried job have only a limited amount of sick leave due to them each year. If your recovery period is extended, your employers may have no obligation to pay you after your sick leave has been exhausted. If you earn weekly wages, it's likely that if you are unable to work, you are unable to earn money. An injury that puts you out of work for more than a few days could also put your household at risk. An extended PIP policy could cover your household expenses and payments until such time as you are able to work again. Some PIP policies also cover funeral expenses and compensation for pain and suffering.

Do you Need PIP if you Have Health Insurance?

Many people that have extensive health insurance feel that they are less likely to make use of PIP insurance in the event of an accident and therefore opt to take PIP insurance at the minimum level. This may be true for you and your household but you need to check on the details of your health insurance. In some states, PIP is required to cover costs of injuries resulting from a car accident and all other expenses will be covered by your health insurance. This can become a bit of a gray area in terms of insurance and having adequate PIP insurance can help ensure that you and your family are adequately covered.

Medical Assistance for Your Passengers With PIP

Quite often, you could be involved in a carpooling club for your kid's school or sport activities. You may occasionally give an elderly neighbor a lift to the library or community center. Short of asking each person, how do you know that those you are transporting have adequate health insurance? The advantage of having adequate PIP insurance is that if you are involved in an accident with other people in your car, they will be able to have access to immediate medical treatment regardless of the status of their health insurance. This can give you as the driver more peace of mind when transporting friends and neighbors.

Personal Injury Protection also has legal advantages in that it can serve as an act of "good faith" and protect you again larger liability claims. Because your passengers will be able to receive immediate medical attention, their injuries can be properly attended to and treated. This means that there will be less risk of latent injury claims resulting at a later date. For example, a back or neck injury could be more severe than it immediately appears. People may ignore the symptoms, only to find they need treatment at a later date. Your ability to offer immediate medical assistance thanks to your PIP policy can prevent legal issues down the road.

What is the Difference Between Personal Liability Insurance and Personal Injury Protection?

The main difference between the two types of insurance is with regards to the liability. Personal Liability insurance kicks in if you have been at fault in the accident. It will cover the costs of any litigation and claims arising from the accident from other parties involved. Personal Injury Protection is more concerned with assisting injured passengers immediately. Regardless of who is at fault, PIP insurance will cover the cost of medical expenses. At a later stage, the insurance companies may make a claim against your Personal Liability Insurance if you were at fault. But initially the medical costs will be made from the PIP insurance policy. These two types of insurance are often both legislated components of auto insurance and they go hand-in-hand to provide you with adequate protection and coverage.CLICKinsure is a leading broker for health, life and auto insurance companies in California. When you need great advice or want to compare auto insurance quotes be sure to visit us online.

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