6/15/2023
PIP or no-fault auto insurance is a coverage option that is not available in all states of the union, but in some it is mandatory. We tell you what it is, how it works and which regions require it.
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What is PIP car insurance?
Often referred to as no-fault insurance, PIP (personal injury protection) insurance serves to cover your medical bills and those of passengers.
This will depend on the policy limits and subtract any deductibles. It may also offer coverage for funeral expenses, lost wages and more, depending on the state where you reside.
Unlike others, personal injury protection does not give you compensation when someone steals or vandalizes your vehicle. Nor does it include a collision section that talks about covering damage to your car or the property of others. However, in most cases it does have restrictions on suing for damages.
There are a dozen states that require personal injury protection and in several you have the option of having it or not. Although coverage amounts vary from state to state, you can get policies for less than $5,000 and up to $50,000. In some instances, it will be possible to increase this limit, but you should check.
In which states is no-fault insurance required?
In contrast to liability insurance (required in all states except New Hampshire and Virginia), PIP car insurance is required in 12 states. The minimum amount of insurance for each person changes depending on the registered address. This list is composed of:
| STATE | MINIMUM PERSONAL COVERAGE |
| Florida | $10,000 |
| Hawaii | $10,000 |
| Kansas | $4,500 |
| Kentucky | $10,000 |
| Massachusetts | $8,000 |
| Minnesota | $40,000 |
| Michigan | $50,000 |
| New Jersey | $15,000 |
| New York | $50,000 |
| North Dakota | $30,000 |
| Pennsylvania | $5,000 |
| Utah | $3,000 |
It is important to know that in KY, NJ and PA drivers have the alternative of taking out a traditional policy or PIP insurance. This does not restrict someone from filing a lawsuit or filing a claim in court related to damages from a collision.
How does PIP auto insurance work?
To understand the dynamics of no-fault insurance, let's use an example. Suppose you collide with a car and both you and the other driver suffer minor injuries.
In the state where this coverage is required, you would have to file a claim through your insurance company to have them pay for any medical expenses you may have.
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The other person involved in the collision would have to do the same. In this particular situation, the idea prevails that neither of the parties involved was responsible for the accident.
The 'advantage' of this course of action is that neither driver has the need to make a claim with the insurer of the 'causer' of the event.
If you or one of your passengers is seriously injured and you want to sue the other driver for damages, you have to meet one of these conditions:
- The severity of the accident causes disfigurement, disability or death (verbal threshold).
- Your medical expenses have to be above a set amount (monetary threshold).
Of course, the application of these rules will depend on the state where the event occurs. In this regard, HI, KS, MA, MN, ND, and UT use the verbal threshold to resolve these incidents. The rest of the states on the list use the monetary threshold to allow for these claims.
What no-fault insurance does and does not cover
Most of these PIP coverages are standard, but each insurer offers different policies. No-fault insurance usually includes:
- Death expenses. This can be burial, funeral, cremation and other situations.
- Lost wages. When you are no longer able to work, some insurance companies set a fixed amount or a percentage of your salary as compensation.
- Medical expenses. This applies to anyone who has been injured and includes expenses for health centers, doctors and other related services.
- Home maintenance services. There are some insurers that reimburse money when you hire someone for home care and maintenance when a medical condition or injury prevents you from doing so.
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Keep in mind that PIP covers you in case of injury, even if you are not behind the wheel. Generally, they can compensate you if a vehicle injures you while you are walking or riding a bicycle.
No-fault insurance is what they call 'sweeping' insurance, so it only applies to injuries to yourself or passengers. For this reason, it does not protect you against:
- Damage to other people's property.
- Criminal or deliberate acts.
- Medical expenses of third parties involved.
Now you know where you need no-fault insurance and what it offers. If you have doubts about this or other insurances, tell us to add it to Busconomico's reviews.
English: ¿Qué son los seguros de auto PIP, sin culpa o "no-fault"?