Personal Injury Protection (PIP) Coverage and Why It Matters

by Nov 21, 2020

For all of us there comes a point where we either need to buy auto insurance (first car – yay!) or we are shopping to switch up our car insurance.  Saving money is usually the number one priority, and that sometimes means we don’t pay attention to every little detail. 

It is important that you do pay attention during the car insurance shopping and signing up experience!

Besides choosing coverage amounts (often based on kind of car, newness, etc. as well as who is driving and who is on the title), you have to choose types of coverage themselves.  More often than not (and I know this from personal experience, too), we glaze over as our agent tells us about Comprehensive or Uninsured motorist coverages, what they cover, what they mean and all  . . . until we ask how much the premium is going to be affected.  Your agent will tell you — because he or she is required to – about “PIP” coverage, which is Personal Injury Protection.  I hear stories from clients and people all over about how they ignore this or choose to trim it or eliminate it to save some money.  Don’t do that!  PIP coverage is IMPORTANT. 

PIP is a no-fault insurance benefit that, while inexpensive overall, adds a crucial and valuable piece to your available car insurance.  If you are involved in a car accident, PIP is available to you to help pay the medical bills and even some of your lost wages.  Minimum coverage is $2,500.00, again for a meager bump in your premium, and, regardless of who caused the accident, it will kick in and help out.

Maryland law requires that an insurer OFFER you the coverage, but you can decline.  IF YOU DECLINE, or WAIVE, PIP, which we recommend you do not do, usually your policy reflects what is termed as “limited PIP.”  This means that you, the insured driver of the car, will not have access to PIP, but it is possible a passenger in your car might be eligible for it, depending on certain factors (beyond the scope of this article). IF YOU WAIVE PIP, you, as a passenger in another car, or an authorized driver of a family member or friend’s car, would not be eligible for PIP coverage!  As we inform clients, when you WAIVE PIP, you waive it across the board.  You cannot get it.  That’s a big deal for such a small, frequently overlooked part of your insurance coverages.

There are manifold benefits with PIP coverage.  Besides those I’ve already mentioned (good ones, too!), remember that you can use your PIP to defray medical costs or help pay lost wages if you missed time from work because of an accident, and, when you use it, IT CANNOT AFFECT your premium.  Under Maryland law, insurers are barred from raising your premium rate because you used PIP coverage. (There has been proposed legislation to bar carriers from altering rates over other usages, but to this writer’s knowledge such legislation has not quite made it to enactment yet, but stay tuned.)

While it is policy-dependent, most people can also enhance their PIP coverage: ask your agent to tell you about additional PIP coverage, sometimes called “med pay.”  Lastly, and also importantly, because medical providers are not supposed to “balance bill” in Maryland, if PIP pays on a bill, and all other insurance coverages are exhausted to cover the bill, then usually, with rare exception, the provider cannot collect what if any remaining amount is left over.  

DON’T FORGET – GET PIP on your auto insurance policy!  If you have questions or wish to set up an appointment, give me a call!