PIP stands for Personal Injury Protection and is one of the covers offered in auto insurance. Here the policy holder is allowed to make a claim in the event of an accident and the insurance provider will cover the damages depending on the policy that is taken. Medical costs are covered under this plan and in some cases lost wages; pain and suffering as a result of the accident are also covered. Most states have made this coverage mandatory and are to be included in every policy.
Under this policy the insurer offers protection and provides compensation to cover medical costs as well as other damages that is a result of the accident irrespective of who is at fault. Since this is a no-fault claim the insurance premiums also don’t get affected by this. In a few states the insurer will have to pay for the policyholder’s expenses even if the other party is the faulty one and later get the money reimbursed from the opposite party or that party’s insurance provider. This way the medical bills are paid off quickly and the policyholder does not have to bear the costs.
This type of coverage is also beneficial for those that are not covered by health insurance. In the event of an accident the injured person is assured of at least 80% of coverage of the medical costs minus the deductibles. Every injured person can receive up to $50,000 which is the maximum limit.
This type of coverage is especially beneficial for those drivers who often travel with a lot of passengers and especially useful in those individuals who don’t have health insurance. Without this coverage the driver will be held liable if he is at fault and if a passenger is injured.
The PIP covers all reasonable and necessary medical costs including hospitalization as well as lost wages, pain and suffering due to the accident, child care, loss of abilities, loss of enjoyment of life etc. In the event of death it will also cover funeral expenses. Every state prescribes different laws and the amount that is settled will depend on the state as well as the seriousness of the injury and can range anywhere between $1,500 to $250,000.
Policyholders must be fully aware of the type of coverage they have. Most often they assume that everything is covered by the insurance policy. For instance, damage to property cover cannot be used to pay for the medical bills.
