Paying too much for insurance?
PIP vs Medical Payments Coverage
What is PIP Insurance?
As the name implies, Personal Injury Protection covers the costs associated with your injuries when you get hurt in an accident.
Depending on the policy’s limits, PIP may cover as much as 80 percent of your lost wages due to injuries sustained in an accident, medical expenses, rehabilitation costs and funeral expenses. PIP coverage also pays for medical treatment needed for passengers in your car after an accident, up to the coverage limits.
PIP can also provide coverage for “loss of essential services.” For example, if your injuries mean that you need to hire someone to help with every-day errands or tasks, PIP insurance may pay for expenses like grocery delivery, child care, etc.
In some states, your PIP coverage also “travels” with you, so if you’re injured as a passenger in someone else’s vehicle, or if you’re injured as a pedestrian in a car accident, your policy benefits may be there to help cover your expenses.
Because coverage does differ from policy to policy, always consult with your insurance professional to get the details of what’s covered under your specific policy.
What does PIP Insurance Cover?
PIP stands for personal injury protection, and it is a type of no-fault auto insurance coverage that includes medical expenses and, in many cases, lost wages.
As “no-fault” insurance, PIP pays claims for your own medical costs after a car accident, regardless of who was at fault in the accident. If you have PIP insurance and are hurt in an accident, you can receive maximum policy benefits whether or not the accident was your fault.
On top of medical bills and lost wages, many people are also surprised to learn that PIP insurance can also cover expenses such as transportation to medical appointments and lawn services.
How is PIP Coverage Different from Medical Payments Coverage?
If you’re not an insurance professional, it can be confusing trying to understand various coverage options.
One common area of confusion is how PIP coverage differs from Medical Payments coverage (also sometimes called Medical Expense coverage.)
Both types of coverage will pay for medical expense you or your passengers incur as the result of a covered accident, regardless of who is at fault for the accident. However, that’s where the similarities end.
PIP insurance also covers additional expenses stemming from an accident, such as lost wages, essential services, rehabilitation and funeral expenses. Medical Payments coverage does not include insurance coverage for those types of expenses.
This chart provides a side-by-side comparison of the two types of coverage:
|PIP Coverage||Medical Payments Coverage|
|Medical treatment for you after an accident in your vehicle?||Yes||Yes|
|Medical treatment for your passengers after an accident in your vehicle?||Yes||Yes|
|Protection for the insured person as a passenger in another vehicle or as a pedestrian or bicyclist?||Yes||Yes|
|Coverage for lost wages after an accident?||Yes||No|
|Rehabilitation expenses after an accident?||Yes||Yes|
|Funeral expenses after an accident?||Yes||Yes|
|Coverage for services or tasks you cannot perform after an accident, like lawn care, child care or grocery shopping?||Yes||No|
Is PIP Insurance or Medical Payments Coverage Required?
Several states require personal injury protection (PIP) or Medical Payments coverage, as a way to protect drivers from delayed payout for personal injury claims, and to lower the amount of lawsuits related to traffic accidents.
PIP and Medical Payments insurance are optional coverages in Texas, however it’s strongly recommended that you talk to your insurance professional about what coverage options will best protect you and your loved ones from unforeseen losses.
Why Choose PIP Insurance?
An automobile accident can physically and financially damage far more than your car. Lost wages, the cost of medical treatment and other expenses can add up quickly and put a serious dent in your wallet. Personal injury protection can help minimize such costs and even help protect your friends and family after a covered accident.
I Already Have Health Insurance
Why do I Need PIP Coverage or Medical Payments Coverage?
Your auto insurance policy should work together with your health insurance after an accident. In many cases, you can opt to have your health insurance policy serve as the primary coverage in the event you were injured in an auto accident. If you do so, you may be able to save money by purchasing lower PIP or Medical Payments limits.
In practice, designating your health insurance as your primary coverage means that your health insurance policy would pay your medical expenses first after a car accident. Then, any expenses related to the accident that exceeded the limits under your health insurance policy would be covered by your PIP or Medical Payments coverage. For example, your auto insurance policy coverage may pay expenses you would otherwise have to pay out-of-pocket like the deductible for your health insurance coverage.
Talk to your auto and health insurance professionals before making a decision about designating a primary policy for medical expenses related to an accident. Some health insurance companies impose limitations, so it may not make sense or even be possible to do so.
How Much PIP Coverage Do I Need?
Your state may have minimum PIP or Medical Payments coverage requirements, so it’s important to make sure you’re meeting those (your insurance professional will help you with this.)
Remember that PIP covers more than just medical expenses. So, one way to approach buying PIP coverage is to add up all of your current expenses, and then to add in extra costs like what you would have to pay for child care if you couldn’t care for your child(ren) after an accident,
and essential services for everyday life. That number can be a helpful starting point for determining how much coverage you should buy.
The amount of PIP insurance you purchase will also depend to a certain extent on how much you can afford to pay. The higher the PIP limits, the higher your premium will be.
Once you have this figure, you can begin to get an idea of how much personal injury protection you may need.
Your San Antonio insurance professional is a great resource to help you evaluate how much PIP coverage makes sense based on your personal situation.