What Is PIP Insurance & Do I Need It

Nov 10, 2019 (0) comment

How can three little letters be so intimidating and confusing?

When it comes to car insurance, many topics are hard to fully grasp, just like homeowner’s insurance.

And sadly, much of the car insurance articles you’ll read online will leave you with more questions.

So, let’s make this as simple as possible. 

​In this post today, I will​ help you understand what is pip insurance is as well as ​how it works and when you need it.

​In This Article



What Does PIP Stand For?

Personal Injury Protection

Is PIP Important?

Yes, PIP is very important.

A good way to remember this is by thinking of the character, Pip, in Charles Dicken’s beloved classic, Great Expectations.

Pip is not only the protagonist, whose actions make up the main plot, but he’s also the narrator, whose thoughts shape the reader’s perception of the story.

Pip indeed is the most important character in the timeless novel.

Depending on where you live, PIP quite possibly could be considered the most important line of coverage you invest in. 

What Does PIP Do For Me?

It will protect you, personally. And like Pip, it knows how to deliver a solid punch:

PIP is also known as "no-fault coverage," because it will pay no matter who is found to be at fault.

PIP will pay medical bills for you and the people in the car with you when you are hurt in a car accident

This coverage can also protect you if a collision occurs while you are a passenger in someone else’s car, or if you are hit by a car while walking or biking.

It’s kind of like your homeowner’s insurance coverage, which can cover the medical bills of a contractor who is injured on your property.

What Exactly Does PIP Cover?

The specific bills PIP will cover vary from state to state. But here is what PIP will usually pay for:

  • 80-100 percent of medical bills: This includes payments for surgeries, prescriptions, ambulance fees, rehabilitation, glasses, hearing aids, etc.

  • 60-80 percent of lost wages: This will pay you back for your actual lost income plus your lost earning capacity

  • 100 percent of services: This includes payments for services for things you can no longer do such as house cleaning, childcare, and yard work

  • 100 percent of mileage: This includes payments for the mileage on your car you rack up going back and forth to the doctors' offices and rehabilitation centers

  • $5,000 in death benefits: If someone on your policy dies, PIP will cover funeral costs and other expenses

Please note, personal injury protection claims typically need to be filed within 14 days of the accident.

Remember, this coverage is only for you and the passengers in the car with you at the time of a car crash. This coverage is for injuries and events that occurred during a traffic accident only. 

What Will PIP Not Cover?

PIP does not pay for any expenses for passengers and drivers in other cars involved in an accident. You need liability insurance for that. 

Again, PIP only pays for the medical bills and rehabilitation needed after car accident injuries. For injuries that didn’t happen in a car crash, you will need health insurance. 

Am I Required To Buy PIP?

That depends on where you live. Currently, 14 states require personal injury protection. 

Where Is PIP Required?

Here are the states where at least some amount of PIP is required

Delaware

Florida

Hawaii

Kansas

Kentucky

Massachusetts

Michigan

Minnesota

New Jersey

New York

North Dakota

Oregon

Pennsylvania

Utah

How Much PIP Coverage Is Required?

Here’s how much those 14 states require for PIP coverage:

Delaware – $15,000 per person & $30,000 per accident

Florida – $10,000 per person, per accident

Hawaii – $10,000 per person, per accident

Kansas – $4,500 per person, per accident  

Kentucky – $10,000 per person, per accident

Massachusetts – $8,000 per person, per accident

Michigan – unlimited with a $0, $300 or $500 deductible

Minnesota – $40,000 per person, per accident

New Jersey – $15,000 per person, per accident

New York – $50,000 per person, per accident

North Dakota – $30,000 per person, per accident

Oregon – $15,000 per person, per accident

Pennsylvania – $5,000 per person, per accident

Utah – $3,000 per person, per accident

In Arkansas, Maryland, and Texas, you can decline PIP coverage by signing a waiver, but that is a bad idea. Here’s a video that helps explain why:

How Much Does PIP Cost?

Car insurance costs vary greatly depending on many factors including the driver’s age, gender, marital status, credit history, driving record, location, type of vehicle, and more. 

There are free car insurance comparison tools you can use that do not require you to provide your social security number.

You start by simply entering your zip code, and it will give you a few of the best policies offered in your area for you to compare.

You can quickly compare PIP prices by top providers in your area using one of these tools.  

Generally, you can expect to pay 15% to 20% more to add PIP to your car insurance coverage. Here’s a video to help explain how that investment will pay off:


Schimri Yoyo is a writer for ExpertInsuranceReviews.com and a financial advisor with active life and health insurance licenses. Born in Haiti. Reared in Brockton, MA. Matured in Philadelphia. Schimri is a proud graduate of Arcadia University, having earned both a Masters in Special Education and an MFA in Creative Writing from the castle-riddled campus in Glenside, PA. By personality and by profession, Schimri is an educator and a storyteller who is eager to assist individuals and families to craft and complete their own financial success stories.

All posts by Mark Mathon

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