Personal Injury Protection (PIP) is an extension of personal auto insurance offered in a No-Fault State. No fault meaning protection from claims by third parties to whom they may be legally liable. PIP Insurance is mandatory in 13 states including the District of Columbia (see DC PIP rule). In some states PIP provides coverage for medical expenses, lost wages and other damages. PIP is often referred to as “no-fault” coverage as it is designed to be paid without regard for fault. .
The original intent of PIP was to reduce auto premiums by limiting the number of lawsuits filed against drivers. PIP insurance removes the question of fault from a car accident. No state has a pure no-fault system because tort actions are permitted if injuries exceed a certain “threshold”.
Although the benefits provided by no-fault coverage vary significantly from one state to another, the general categories include:
- MEDICAL EXPENSES – Limits typically range from $5,000 to $250,000, although a few states provide unlimited benefits.
- REHABILITATION EXPENSES – Range from $0 to $50,000.
- FUNERAL EXPENSES – Range from $0 to $5,000.
- LOST WAGES – Limits typically range from $140 to $750 per week; often based on a percentage of salary and with caps based on time. Some states have a waiting period of 1-2 weeks.
- ESSENTIAL SERVICES EXPENSES – Structured similar to those for lost wages, although usually less, and apply to on-going expenses such as child care, housekeeping services, etc.
- SURVIVOR BENEFITS – Limits may be structured similar to those for lost wages, but at a reduced amount, comparable to workers compensation.