Every quote I get has PIP listed on it. What is PIP? Do I need it?

Written by Ryan Lowell on December 7, 2010 & Posted in Insurance

You're not Gladys Knight, so why do you need PIP?

Dear Ryan,

Every quote I get has PIP listed on it. What is PIP? Do I need it?

Bob H. Boston, MA

Great question, Bob.

PIP stand for Personal Injury Protection, and in many states it is a required component of your auto insurance policy. PIP offers medical coverage for injuries sustained in an accident, regardless of fault, for you and your passengers. PIP pays for medical bills, and may also offer coverage for replacement of services, loss of income, and even funeral expenses. Some states offer Medical Payments coverage, or MedPay, instead of PIP.

It is often faster and easier to file a PIP claim with your own insurance company after an accident, so your doctors can be paid right away. You don't have to wait for the claim to be settled before your doctors are paid, or pay out of pocket and wait to be reimbursed yourself. Your insurance company has an entire department of professionals to file and settle subrogation claims, so let them handle it.

After paying you, your insurance company will then go after the other driver's insurer for reimbursement (the process is called subrogation) if you are not at fault.

PIP can also cover you for injuries received outside of an auto accident. For example, in Oregon PIP coverage pays for injuries sustained from the use, maintenance, or ownership of an automobile. Slam the door on your hand and sever a finger? PIP will pay for that. Additionally your PIP insurance may cover you as a pedestrian or bicyclist if you are the victim of a hit-and-run. PIP coverage varies greatly by state, so be sure to read your policy carefully.

Your second question of whether you need PIP is a little tricky. In short, you may not have a choice, and a minimum level of PIP coverage may be mandatory. If you have good medical insurance and disability coverage, you may not need any additional PIP coverage, however. If you are without medical insurance, additional PIP may be a good idea.

You stand a greater chance of receiving a traumatic injury in your car than just about anywhere else, and PIP may be a cheap way to protect yourself against that risk. Get quotes on additional PIP options if they are available so you can do an effective cost/benefit analysis for your specific situation.

Ryan Lowell


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