Personal Injury Protection
Personal Injury Protection (“PIP”) is a provision on an auto insurance policy that pays for medical expenses, lost wages, loss of household services and funeral expenses following an accident. When the insured individual is in a motor vehicle accident, regardless of fault, the insurance company pays for “reasonable and necessary” expenses described above.
Minimum PIP Coverage
Depending on your policy and the state you live in, minimum PIP coverage typically pays up to $10,000 in medical bills; $10,000 in lost wages, which is paid at amount of up $200 per week after the first fourteen days following the accident; $2000 in funeral expenses: and $5000 for loss of services, subject to a maximum of $40 per day and $200 per week. Loss of services would be such items as housekeeping or yard maintenance. Thus in the event the injured insured’s injuries prevented them from performing such tasks, the insurance company may reimburse them for these expenses up to the amount of the specified limits.
Benefits of PIP
PIP coverage is of great benefit to an insured when faced with significant expenses following an accident. While if you have health insurance, it may be able to cover treatment caused by a motor vehicle accident, it does not cover all treatment, especially treatment such as chiropractic or massage. Furthermore, following an accident, PIP insurance is primary. After an injury caused by a motor vehicle accident, your health insurance company would likely make you provide proof of no PIP coverage, and only pay in the absence of coverage or once the PIP coverage has been exhausted, per the terms of the policy. Because it is such an important coverage, some states require you to waive PIP coverage in writing if you do not want it on your auto insurance policy. In the absence of a signed waiver form denying coverage, insurance companies may be compelled to retroactively extend PIP coverage.
Optional Higher Limits
You can also purchase higher limits of PIP coverage from your auto insurance company. For example, in Washington State, the higher optional level of PIP coverage pays up to $35,000 in medical bills; $35,000 in lost wages, paid at amount of up $700 per week after the first fourteen days following the accident; $2000 in funeral expenses: and $14,600 for loss of services, subject to a maximum of $40 per day. Some auto insurance companies also offer med–pay coverage, which is different than PIP. This is more limited coverage and typically covers medical bills only up to $5,000, depending on the policy. Some states require you to waive PIP coverage in writing if you do not want it on your auto insurance policy. In the absence of a signed waiver form denying coverage, insurance companies may be compelled to retroactively extend PIP coverage.
Other Applications for PIP
Depending on your state, PIP coverage may also apply in bicycle or pedestrian accidents. A bicyclist or pedestrian injured by a vehicle is typically covered under the PIP provision of the driver’s insurance policy, regardless of fault. If the driver that strikes a pedestrian or bicyclist does not have insurance or is underinsured, the injured person may be able to use their PIP coverage or their parents’ PIP coverage to help pay for damages such as medical bills and lost wages following an accident.
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