PIP - Auto Insurance

What is PIP in Car Insurance?

<lingo>PIP is short for Personal Injury Protection Insurance. It is a type of loss protection coverage that is the foundation of car insurance protection in states with "no-fault" auto insurance. Personal injury insurance assures that the insured's medical expenses and lost wages are covered by their own insurance provider without having to first determine who is at fault in an automobile accident. In states that require PIP insurance, policyholder's get the benefits of this “no-fault” coverage by agreeing there will be no lawsuits against an at-fault party.</lingo>

PIP Clearly and Briefly Explained

The principle behind PIP insurance is that everybody should have access to lower prices for their automobile insurance because coverage is for their own injuries and resulting expenses. This is intended to lead to fewer lawsuits as a result of automobile accidents. Those with PIP insurance benefit in that they can seek medical attention immediately without concern of co-pays or deductibles. PIP insurance is “first dollar” coverage that means policyholders should not have to pay anything out of pocket for treatment.

<twitter>Personal injury insurance assures that the insured's medical expenses and lost wages are covered by their own insurance provider without having to first determine who is at fault in an automobile accident.</twitter>

Unfortunately, states that require PIP insurance as part of their no-fault coverage are among those that pay the highest auto insurance premiums in the country. This is frequently due to the fact that medical providers (with the consent of the insured) can take advantage of lengthy treatments that may be unnecessary but are covered until benefits are exhausted. In many cases, it leads both the insured and the medical professional involved to take a "use it or lose it" attitude when it comes to policy limits. 

This routinely occurs even though policies generally have a covenant that states treatment is required to be “reasonable and necessary”. The term no-fault and personal injury protection are often used interchangeably and less than a dozen states require PIP coverage. 

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