Personal Injury Protection is insurance that covers medical expenses for you and your passengers, regardless of who is at fault for the accident. That’s the short explanation. Here’s the breakdown of how it works:
Your PIP only covers up to 80% of medical bills up to $10,000 and up to 60% of lost wages up to $10,000 after an accident. You are responsible for the remaining 20% and 40%, respectively.
Your PIP not only covers you (the policy holder) and your passengers after an accident, it also covers relatives living in your household. Even if your family members are riding in someone else’s car or are struck by a vehicle while walking on the street, they are still covered by your PIP.
Usually, the protection limits cap out at $10,000, unless you opt for additional coverage, which is not recommended if you have health insurance. This means that if you were taken to the emergency room by ambulance, you might already be dangerously close to maxing out your PIP protection. If this seems likely to happen, and you’re reasonably certain you’ll miss work as a result of your injuries, you can ask your PIP adjuster to set aside some money for lost wages.
The PIP works as a safety net to cover your most pressing expenses after an accident. But after that money is spent, you’ll have to wait for the final settlement for any further compensation.