Personal Injury Protection coverage, or PIP is an auto insurance optional add on to primary coverage that covers the policyholder for all necessary medical expenses, offers assistance for funeral expenses if needed and even covers a certain percentage of lost wages in the event that the policyholder is injured in an automobile crash. This coverage ensures compensation regardless of who is at fault for the crash.
PIP is an option that is taken out when a policyholder has their insurance contract drawn up. The coverage is not very expensive. This low sales margin explains why so few insurance agents offer it. It covers all reasonable and necessary medical costs, and can be taken out to cover up to $100,000 in expenses, though the average protection hovers in the neighborhood of $10,000. There are states however, where insurance companies and agents are required by law to not just make the coverage available, but to actually offer it to prospective clients.
Many people believe that because they have adequate health care coverage, coupled with the low cost of the add-on, they can get along just fine without personal injury protection coverage. This is flawed reasoning for several reasons. For one thing, health insurance comes with copays, deductibles and restrictions; restrictions on number of visits they will pay for, restrictions on which medical treatments they can take advantage of, and where. There can even be restrictions on the need for referrals for more specialized treatments.
Personal injury protection coverage comes with absolutely none of these conditions attached. It doesn’t even matter who was at fault, as long as the policyholder was injured in an auto accident, that policyholder is protected up to the amount of PIP coverage they have taken out. Further, with health insurance, you are very likely to pay out of pocket at some point. This is not a risk taken with PIP.
A PIP coverage plan also covers a portion of funeral expenses where applicable, as well as compensation for lost wages in the event that the accident leaves the victim unable to work. It will also cover substitute services in case the victim is left unable to care for themselves, such as cooking or cleaning.
It should be noted that under a PIP coverage plan, should the policyholder be compensated for their injuries by way of the party at fault via their insurance company for instance, the policyholder is legally expected to reimburse their own insurance company for any monies paid out for medical services. One of the advantages of having a personal injury lawyer is that in this event, the attorney can negotiate with the victim’s insurance company to reduce the amount that must be paid back to them.
Finally, it bears mentioning that in the event of a catastrophic automobile accident, if insurance companies see the victim is not protected by PIP coverage, they know that victim is going to end up having to pay out of pocket for medical costs and will likely have problems paying the resulting medical bills. The company can and often will then use this as leverage to refuse a fair out of court settlement, counting on the victim to take less than they are entitled to rather than suffer a lengthy lawsuit while the bills stack up.
When these advantages are considered, it becomes clear that rather than being a luxury that insurance policyholders can’t afford, personal injury protection coverage is an important aspect of comprehensive auto insurance that the wise driver understands they cannot afford to go without.