Personal injury protection (PIP)

Personal injury protection (PIP) is first-party injury coverage: it pays your own costs after a crash regardless of fault. Depending on the state, PIP covers medical and rehabilitation bills, a share of lost income, replacement services such as childcare or housework you cannot do while injured, and funeral expenses. It does not pay for damage to cars or for pain and suffering.

PIP is the core of no-fault insurance. In no-fault states it pays first, and you can sue the at-fault driver for pain and suffering only if your injuries pass a tort threshold. Required amounts vary widely: Pennsylvania requires $5,000 of medical benefits, Florida $10,000, New York $50,000, and Michigan drivers choose a level up to unlimited. Some at-fault states also require PIP or include it unless you reject it in writing.

Example: in Florida, PIP pays 80% of reasonable medical bills and 60% of lost income, up to the $10,000 limit, when a doctor finds an emergency medical condition. With $9,000 in medical bills and $3,000 in lost wages, PIP pays $7,200 plus $1,800 (hypothetical figures). In states where PIP is not required, medical payments coverage plays a similar but narrower role. See Personal injury protection (PIP) explained.