Personal injury protection (PIP) is a type of insurance policy that covers the holder in the event of a car accident whether they were alone, at fault, or not. This means that you do not have to wait for a lawsuit settlement to pay off medical and legal fees.
Normally, PIP covers you, family members, persons driving the vehicle with your permission, and any passengers in the car. Some policies also cover the holder if injured as a cyclist or pedestrian, and while driving someone else’s vehicle.
PIP pays for expenses like medical bills, survivor loss, funeral fees, lost wages, and additional services you’d normally pay for, like childcare. However, it does not reimburse for property damage, driving for commercial purposes, the other party’s compensation where the policyholder caused the accident or expenses that exceed individual coverage limits.
State governments usually set these minimum limits, while the insurance company determines the maximum amount you can receive. Basically, most regulations surrounding PIP insurance depend on the state you live or are driving in.
PIP and No-Fault States
In a no-fault state, an individual’s insurance company is required to pay for their policyholder’s expenses should they get into a car accident. This law was introduced to simplify the lengthy, and sometimes complex, process of determining fault and liability during lawsuits. Currently, there are 12 no-fault states in the US, including New York.
PIP coverage is sometimes referred to as no-fault insurance because the payout process does not need to determine fault, just like in these states.
The laws in these states also restrict drivers or other accident victims from suing the party at fault unless they have suffered catastrophic injuries or the resulting expenses exceed their health insurance limits. With such cases, a car accident attorney in Brooklyn can help you claim and get your compensation.
PIP and At-Fault States
In states that use the at-fault insurance system, the party whose negligence caused a car accident is responsible for covering the victim(s’) medical bills and other related expenses. The process involves first, investigating the crash to prove fault. After this, the perpetrator’s insurance company reimburses all the injured parties for things like lost wages, healthcare bills, legal fees, loss of love, pain, and emotional suffering caused by the crash.
There are at-fault states that still require drivers to carry PIP insurance as well. This way, when another party’s negligence causes an accident, you can still take care of immediate bills with PIP before recovering the settlement from an insurance provider.
Do I Need PIP Insurance?
This is a commonly asked question and the answer always depends on where you live or the state you are driving in.
If you live in a no-fault state, then having PIP insurance is compulsory. The law requires it, and it’s an ideal way to protect yourself, your family, or car occupants in case of an accident. For maximum protection, the amount you pay in premiums should depend on what your health insurance covers in terms of car accident injuries.
PIP is optional for people who live in at-fault states where this cover is not compulsory. However, it can come in handy for people whose health insurance has limits on car accident-related injuries.
As you can see, the determining factor for whether you need to purchase PIP is your other existing insurance covers. Some health policies will cover injuries resulting from a crash but up to a certain limit. If you find that PIP offers more benefits related to car accidents, consider purchasing it as an add-on to your auto insurance even if you are in an at-fault state.