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What Should You Know About Personal Injury Protection (PIP) Insurance?

Personal Injury Protection (PIP) InsuranceIf you live in a state with no-fault laws, such as New York, and you’re in an accident, the claims process can be extremely complicated. There are frequently new cases that happen in the court systems of no-fault states, and they then change the regulations as a result.

Understanding personal injury protection and no-fault laws, in general, can help alleviate some of the confusion and complexity you might experience if you’re in one of these states and you’ve been involved in an accident.

No-Fault Insurance

First, no-fault insurance laws are in place in twelve states. In these states, the benefits for personal injuries are covered for each driver by their own insurance company, and fault is irrelevant. The general concept in these states is to provide each driver with a minimum level of coverage for injuries without having to go through the process of determining who’s at-fault in an accident.

The states with no-fault insurance laws aim to take small personal injury claims out of the court system.

In a no-fault state, as a driver, you have first-party coverage if you’re injured in an accident, meaning you have coverage from your own insurer.

In a no-fault state, your car insurance policy has to include personal injury protection (PIP) insurance. PIP covers minor injuries.

Since drivers in a no-fault state are required to have first-party coverage, if you’re hurt, you can’t sue the other driver unless your injuries are severe.

Beyond the no-fault states, there are three choice no-fault states that let you opt-out of the no-fault system. Then, the other 38 states are tort states.

In a tort state, there isn’t a restriction on your right to sue following an accident, even if PIP insurance is part of a driver’s coverage.

No-fault insurance doesn’t include car property damage. The at-fault driver is always responsible for paying for car repairs.

Depending on the no-fault state where someone lives, there are options to sue but only with severe injuries, as was touched on. What severe means varies from state-to-state. For example, in Florida, the threshold to file a lawsuit is the loss of bodily function, disfigurement, permanent scarring, permanent injury or death.

In Hawaii, on the other hand, the threshold is medical expenses greater than $5,000 or permanent loss of body function, disfigurement or death.

The Basics of Personal Injury Protection

PIP coverage is also frequently referred to as no-fault insurance. It helps cover expenses related to an accident, such as medical bills or lost wages, regardless of who’s at fault. PIP may also cover services you can’t perform anymore such as housecleaning, funeral costs, and a death benefit in the form of a cash payout.

If you file a claim with your insurance company, you may have to pay a deductible.

Coverage from PIP extends typically to the policyholder and their family in their household, passengers in the car, and people who are driving the car with permission.

Again, PIP policies don’t pay for damage to cars or other property.

If you live in a no-fault state and you want damage to your car to be covered, you have to buy liability coverage.

PIP doesn’t provide compensation for pain and suffering. In no-fault states, if you meet the threshold to file a lawsuit, then you can sue the other involved driver for these losses. You can’t claim pain and suffering for relatively minor injuries.

PIP vs. MedPay

PIP and MedPay are two types of insurance that have similarities to one another. They are both for necessary, immediate medical expenses after an accident that leads to injuries.

MedPay is less comprehensive than PIP. MedPay is optional everywhere but in two states. It covers medical costs for the insured person, other drivers on the policy, and members of the policyholder’s household.

MedPay is often viewed as a supplement to your health insurance, and in some cases it may act as your primary health care coverage following an accident.

If your MedPay coverage is a supplement, then your health insurance is used first and MedPay is used for co-pays and deductibles. If it’s primary, MedPay covers the initial and immediate medical expenses while your health coverage is for ongoing expenses.

MedPay can be used alongside PIP for more coverage or in addition to standard liability coverage.

There are benefits of having MedPay coverage.

For example, it will pay your medical expenses quickly, regardless of fault. In a tort state, it can take months or years to get your losses covered when fault is an issue. There is no co-pay or deductible associated with MedPay, and you’re covered if you’re hurt as a passenger.

How Much Does PIP Cost?

There’s quite a bit of variance in the cost of PIP depending on the state where you live. A lot of this variance is because there are so many different requirements in each state.

When looking at the 12 no-fault states, PIP limits range from $2,500 per accident up to unlimited medical expenses.

Delaware, Florida, Maryland, New Jersey, and Michigan tend to have among the most expensive PIP coverage plans.

Filing a PIP Claim

If you’re in an accident, you submit a claim as you would with any other insurance policy. For example, you can probably do it online. If you’re going to have medical expenses that aren’t urgent and are ongoing beyond your immediate care, you’ll probably need pre-approval from your PIP company.

There are pretty strict timelines set forth by insurance companies that you need to follow when you submit a claim.

For example, in New Jersey, any medical care you receive within the initial 10 days after your accident has to be approved by your insurance company.

If you live in a no-fault state, understanding PIP coverage is important. It’s also imperative to learn your state’s insurance minimums and other related laws, which can vary significantly between no-fault and tort states. If you have questions regarding severe injuries, even in a no-fault state, you should likely speak to a personal injury attorney.

 

South Florida Caribbean News

The SFLCN.com Team provides news and information for the Caribbean-American community in South Florida and beyond.

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