PIP insurance, or Personal Injury Protection, is a type of motor vehicle insurance that provides financial coverage for medical expenses, and sometimes other expenses such as lost wages, as long as they are related to injuries sustained in an automobile accident. The compensation is paid on a first-party basis, that is, it is paid directly to the insured party, even if that motorist is the driver at fault. The insured person is therefore covered for medical expenses, in particular, even if the other person is uninsured. This means that, in the cases where there is a dispute about legal liabilities, the person injured need not await compensation from the other person's policy.
Personal injury protection (PIP) is available from insurance carriers in any state whether they are no fault or tort states, and is required by law in some. In those states where it is mandatory, the law stipulates the minimum amount of personal injury protection for which every motorist and vehicle owner must be covered. One of the major original goals for instituting PIP was the hope that, by ensuring that even the person who was at fault would be compensated, people who had been injured in automobile accidents would be less likely to file excessive and frivolous claims and suits for injuries against the other driver or drivers involved in the accident. Persons who have PIP coverage cannot normally seek legal recourse against the other driver or drivers.
Those states in which PIP is required are generally also known as "no fault" accident states, because of this requirement that fault not preclude financial compensation for injuries. In this system, each motorist's auto insurance pays the medical bills pursuant to an accident regardless of who is at fault. Even if a person is at fault for causing an accident, if he or she is injured, that person will need medical care. Since other forms of insurance might not provide coverage except for the third party, or might not cover the expenses for these kinds of injuries, PIP takes up the slack and ensures that the expenses of all parties are taken care of. It is limited coverage. Once it has reached its limits, other coverage or medical insurance will be required to cover the additional expenses.
PIP is not liability insurance. It does not cover a motorist's liability for the injuries caused to other persons in an accident. In some states, the PIP coverage is attached to the motorist, so that a motorist will have personal injury protection wherever he or she might be and even if he or she is driving someone else's vehicle. In other states it is attached to the vehicle, and will cover the authorized driver of the automobile, whoever that might happen to be.
Filing a PIP Claim
The first thing that must happen, of course, assuming that the injuries allow, is that the insurance carrier must be contacted. A report must be filed informing the company of the accident and the injuries sustained. A claims representative will be assigned who will review the case and inform the injured motorist whether the PIP coverage will come from that person's policy or another, and the extent of the coverage that will be paid. The claims representative will send the forms that need to be filled out, and will arrange for payments to be made as necessary. He or she will also inform the claimant, with a letter of exhaustion, when the PIP limits have been reached.
Typically, PIP insurance only covers a percentage of medical expenses, but it also covers lost wages, housekeeping, mileage reimbursements and other expenses made necessary by the injuries sustained in the accident.