Personal injury protection, usually called PIP, is auto insurance that pays your medical bills, a share of your lost wages, the cost of hiring help for household tasks you can no longer do, and a death benefit to your family — all regardless of who caused the crash. It is the core coverage in no-fault auto insurance systems, and it pays quickly because your insurer does not wait for a fault determination before writing checks. What it does not pay for is just as important: vehicle repairs, damaged belongings, and pain and suffering sit outside PIP entirely.
Medical Bills PIP Pays
Medical costs are the heart of PIP. As long as treatment is reasonable, necessary, and tied to injuries from the crash, PIP covers it. That includes ambulance transportation, emergency room visits, hospital stays, surgery, X-rays, and nursing care. Rehabilitative care counts too when a provider prescribes it as part of your recovery — physical therapy and occupational therapy are the common examples.
Dental work caused by the accident is a standard inclusion. A tooth broken or knocked out by the impact is treated like any other crash injury. PIP money can also go toward medical equipment you need while you heal, whether you buy it or rent it: wheelchairs, crutches, walkers, prosthetic devices.
Treatment generally has to come from a licensed healthcare professional and has to connect directly to the crash. Elective or unrelated care is not covered. Many states cap what a provider can charge under PIP by tying reimbursement to a schedule, often based on Medicare rates, so the dollar amount paid per service can be lower than what the provider might bill a private-pay patient.
Lost Wages
PIP replaces part of the income you lose when injuries keep you off the job. Most policies reimburse somewhere between 60 and 80 percent of your pre-accident gross earnings, with the exact percentage set by state law.
Getting paid takes paperwork. Your insurer will typically ask for a wage verification form from your employer and a statement from your treating doctor confirming that your injuries prevent you from working. Keeping clean records of your pre-accident income shortens the processing time.
Essential Services Around the House
PIP also pays for what insurers call essential or replacement services. These are the tasks you handled at home before the accident but can no longer manage because of your injuries. Common examples: cleaning, cooking, laundry, lawn care, and childcare.
The mechanics are simple. You hire someone to do the work, and PIP reimburses you. Keep the receipts and invoices, because the insurer will want them. Daily and weekly limits vary by state; some states cap payments around $25 a day, others allow up to $200 a week.
Death and Funeral Benefits
If a car accident is fatal, PIP pays a death benefit to the deceased person’s family to help with funeral and burial costs. The amount is usually a fixed sum set by state law or policy and tends to run in the low thousands of dollars. Florida’s statutory death benefit, for instance, is $5,000. These funds move quickly, so families are not waiting on an estate settlement or lawsuit to handle immediate expenses.
Surviving dependents may also receive the remaining balance of the PIP policy limit, depending on state law. The intent is to partially replace the financial contribution the deceased made to the household.
Who Is Covered
PIP protects more than just the person named on the policy. In most states the coverage extends to:
- You, the policyholder, in any auto accident — whether you were driving, riding as a passenger, or walking.
- Relatives who live in your household, even when they are hurt riding in someone else’s car, as long as they do not have their own PIP policy.
- Passengers in your insured vehicle who do not have their own PIP coverage.
- Pedestrians or cyclists struck by your insured vehicle.
Which policy pays first when more than one could apply is a question of state law. The underlying design is that an injured person has at least one policy available to pick up immediate costs no matter how they were traveling.
What PIP Does Not Cover
The exclusions are where people get surprised, so read them carefully. PIP does not pay for:
- Vehicle damage. Repairs to your car or anyone else’s require collision coverage or property damage liability, not PIP.
- Personal property. A laptop crushed on the passenger seat is not reimbursed through PIP.
- Pain and suffering. Non-economic damages such as emotional distress or loss of enjoyment of life sit outside PIP’s scope. If your medical bills come to $8,000 on a $10,000 policy, PIP pays the $8,000 in bills and nothing extra for the distress of the experience.
- Bills over your policy limit. Anything above the cap is yours to cover unless another source applies, such as health insurance or the at-fault driver’s liability policy.
States also allow insurers to deny PIP claims in certain situations. Common examples include injuries from intentional self-harm, injuries sustained while committing a crime, and injuries from driving under the influence of drugs or alcohol. The specifics vary by state and by insurer, so the exclusion section of your own policy is the one that matters.
How Policy Limits and Deductibles Shape What You Actually Receive
PIP has a single overall policy limit, and medical bills, lost wages, essential services, and the death benefit all draw from it. A $10,000 policy pays a combined $10,000 across every category, not $10,000 each. State minimums generally fall somewhere between $2,500 and $50,000.
PIP policies can also carry a deductible, which is the amount you pay out of pocket before coverage kicks in. With a $1,000 deductible on a $5,000 lost-wage claim, your insurer pays $4,000. A higher deductible lowers your premium but raises your out-of-pocket exposure when something happens. Not every state allows PIP deductibles, and available amounts differ by state and insurer, so ask yours directly.
How PIP Differs From MedPay
Medical Payments coverage, or MedPay, gets confused with PIP because both pay regardless of fault. The scope is narrower, though. MedPay pays medical bills only. It does not cover lost wages, and it does not cover essential household services. In some states, if you later recover money from the at-fault driver, your insurer can require you to repay MedPay benefits; PIP benefits generally do not have to be repaid.
MedPay shows up more often in fault-based states that do not run no-fault systems. Where both are offered, PIP is the broader protection because it reaches income and household help in addition to healthcare bills.
How PIP Works Alongside Your Health Insurance
When you carry both PIP and private health insurance, PIP is usually the primary payer for crash injuries. Your auto insurer processes the PIP claim first, and once that limit is exhausted, your health plan picks up additional covered costs. That order can spare you copays and deductibles on the health side during the early stretch of treatment.
Some states let you buy a coordinated PIP policy that flips the order, making health insurance primary and PIP secondary. Coordinated policies tend to have lower premiums, but you may be on the hook for your health plan’s copays and deductibles before PIP fills in. Coordination rules differ sharply by state, so compare both options with your insurer before you choose.