Warning: Personal Injury Protection (PIP)/ No Fault Coverage

The next one we’ll look at is MEDICAL COVERAGE, sometimes known as PERSONAL INJURY PROTECTION or PIP or NO FAULT coverage. This coverage will actually cover YOUR medical expenses if you are in an accident no matter who is at fault. “What about the bodily injury liability coverage we just learned about?” you may be asking. Good question, and here’s how it works.

If you were in an accident and were hurt, no matter who was at fault, chances are that your PIP would be enacted to begin paying your medical costs. Don’t think that this gives you an out to carrying lower liability limits however, because most states only allow you to purchase PIP limits of $10,000 or lower. This coverage, depending on the state, may also pay for your lost wages in the event you are out of work due to an injury. If your policy says PIP, chances are that that is the case. If it only states MEDICAL COVERAGE, it may not cover lost wages, but you still may have a separate coverage that does. Be sure to check with your insurance company so you know what yours does and doesn’t cover. Most states require you to have PIP coverage as part of the policy, but even then most will allow you to waive it if you so desire. This MAY make sense for you to do, but it really depends on several variables. For one, let’s say you have fantastic medical insurance with no deductible and HUGE yearly payouts. You may not have quite the need for PIP as someone who doesn’t have medical insurance, or who has very high deductibles to satisfy if he/she is injured. You may be rich, and would rather put the money you would put into PIP coverage in the bank instead.

Finally, you may be stubborn, and just feel that if you have an accident and the other person is at fault, he will pay one way or the other…and if it is YOUR fault, you willdeal with it when it happens. (I use this last one because it is almost exactly what a policyholder said to me one time…) The bottom line on this coverage is it’s not very expensive, and it usually makes sense to carry it even if you only have the minimum offered.

Your medical bills will be paid up to the maximum, you will recoup lost wages (up to the maximum on your particular policy) and it won’t affect your policy negatively by enacting the coverage. In fact, if EVERYONE had higher PIP limits, it would actually lessen the total payouts for BODILY INJURY LIABILITY and may result in lower premiums across the board for that coverage.

Photo credit/Flickr/lennox_mcdough

Photo credit/Flickr/uriba

This entry was posted on Saturday, July 25th, 2009 at 6:53 am and is filed under article. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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