Who Pays the PIP in Auto Insurance?
- Personal Injury Protection (PIP) or "no fault" insurance refers to the medical, hospital, and funeral expenses incurred in an accident within the specified limits of the insurance policy. PIP covers the policyholder, other people in the vehicle and pedestrians hit by the policyholder. PIP limits vary by state and are summarized on the coverage definitions page of the insurance policy. Certain types of PIP not are available in all states. To find out if your state requires PIP coverage, contact your auto insurance company.
- There are various types of PIP, including:
Bodily Injury Liability - This type covers other people's bodily injuries or death for which the policyholder is responsible.
Personal Damage Liability - This type covers the policyholder if their car damages someone else's property.
Personal Damage Coverage - This type covers the policyholder's vehicle and other people's car the policyholder may be driving for losses in accidents that do not involve collision. An example would be if your car was stolen or damaged by a flood.
Collision Coverage - This type covers damages to the policyholder's car if the policyholder hits, or is hit by, another vehicle or object.
The other types of coverage include bodily injury coverage for insured and uninsured motorists. - The insurance company of the person responsible for the accident pays the PIP benefits. If they do not pay within 30 days of the accident, the policyholder's insurance company pays the PIP benefits and recoups the cost from the other insurance company at a later date.
- Tip No. 1 - Ensure your coverage includes legal coverage in case you are sued as a result of an accident.
Tip No. 2 - Be sure to set your coverage limits high enough to adequately cover the costs of an accident. If you set the limits to low, you put yourself at risk financially.
Tip No. 3 - The coverage limits listed on the policy refers to the amount the insurance company will pay for each accident.
