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Personal Injury Protection Explained

Personal injury protection (PIP) is a certain type of auto insurance endorsement which is available in some states. It is also sometimes called "no-fault" coverage, because as a general rule, the states which allow personal injury protection insurance are the ones with some sort of no-fault auto insurance laws on their books. On a basic level, PIP covers the medical expenses of the insured policy holder in the event of an accident, without regard to fault or liability. Personal injury protection is an important concept to understand for auto insurance consumers living in states where this type of personal coverage is available.

PIP Paid Without Fault Consideration

One important and distinctive feature of personal injury protection is its no-fault nature; that is, the very fact that it pays out without any regard to fault or liability in an auto accident. This is in stark contrast to the bodily injury portion of an auto liability policy, which only covers the expenses of the other driver (not the covered policy holder) and other passengers in the non-covered vehicle-but only in instances of liability on the part of the policy holder. Personal injury protection is different in a few ways.

First of all, its obvious de-emphasis on liability puts the focus more squarely on protection and not on assigning blame. This much is certainly true without argument. But what's more compelling, perhaps, is the simple fact that having the option of personal injury protection allows the claimant (the covered party) to receive compensation for the cost of their own injuries from their own auto insurance coverage, a feature not found on liability policies' bodily injury provisions. Optional medical payments coverage can be added to policies in these scenarios, but PIP coverage protects the covered policy holder in ways simple liability coverage cannot.

When dealing with a basic liability issue following a car accident, the claimant often has to wait for months or even longer to receive any kind of payment from the liable driver's auto policy-and sometimes only after spending time in court or jumping through assorted other hoops in an effort to actually get what they have coming. The advantage of states allowing personal injury protection is that the consumers themselves-the policy holders carrying PIP plans on their auto policies-can receive payments in some cases directly from their insurers to cover their medical bills, and leave the wrangling over liability to the providers themselves. This promotes a greater rate of compensation for claimants.

PIP Mandatory in Some States

Personal injury protection really does present a number of definite advantages for covered policy holders in no-fault states. For example, by its very definition, the premium associated with a personal injury protection insurance policy should not increase because of a PIP claim. This is in contrast with many varieties of auto insurance coverage, which car owners carry with the mindset of only using them if absolutely necessary because of the long-term effects claims can have on premium rates.

In some states, personal injury protection is actually mandatory, as a portion of a driver's overall compulsory stable of auto coverage as defined by each state. But the specifics of each state's definition of PIP coverage, as well as the mandatory portions of coverage and the allowances and exclusions of coverage, can vary across state lines. For example, the definition of what constitutes permissible medical treatment in the aftermath of a car accident varies from state to state. Some states have much stricter guidelines and narrower definitions of necessary and helpful medical treatments appropriate to administer for certain accident-related injuries, while others are much looser and more lenient in their interpretation of such definitions, giving both accident victims and medical professionals more latitude to work with in these cases.

Other differences among the different states mandating PIP coverage for all drivers include the way in which payment is determined and administered to the covered policy holders. As mentioned previously, in many cases personal injury protection allows the covered driver to receive payment directly from the insurer after an accident, covering all accident expenses prior to any pursuit of repayment from the other driver's liability coverage. In these cases, your personal injury protection is known as a subrogable form of coverage, meaning you get paid up front, before the insurer attempts to recover (or subrogate) whatever it can from the opposing auto insurance carrier.

PIP Extends Beyond Covered Driver

Personal injury protection is a tremendously valuable form of auto insurance coverage, because of the unique way it protects covered policy holders from a very specific set of potential financial costs that can arise in the wake of an auto accident. But this protection is not limited to only the covered driver of an automobile carrying PIP coverage. In some cases, personal injury protection can also extend to others. It often includes provisions for taking care of medical or funeral expenses of the insured driver, any passengers in the vehicle at the time of an accident, and even pedestrians who happen to be struck by the covered car while the vehicle is on the road.

In states that offer personal injury protection, it is highly advisable (in non-compulsory situations) that auto insurance consumers take on this form of coverage as a way of adding to their overall package of protection and providing for a more substantive means of specifically protecting themselves against the possible cost of medical care for themselves and others. Some states that do not offer PIP do offer auto medical payments coverage, which is similar to personal injury protection but differs in certain respects. Some states even allow auto policy holders the option of buying both PIP and auto medical payments coverage. In any case, a savvy auto insurance consumer will research the requirements and provisions for PIP for his or her own home state and use the information as a basis for deciding whether to add this coverage. As mentioned earlier, it is required in some, but not all states in which it is available.

Personal injury protection is a coverage option available to auto insurance customers that seems to espouse all the most positive features envisioned by those who set down no-fault law in states all across the country. It is designed to shift the emphasis for insurers in the aftermath of an auto collision from the determination and subsequent assignment of blame, to the simple compensation of covered policyholders who've paid their dues in the form of premiums. This emphasis on just getting claims paid out and not having to worry quite so much about liability or blame was one of the original reasons for the early popularity and the spread of different variants of no-fault auto insurance law. Its implicit intent was to curb unnecessary litigation and get drivers back on the road as quickly as possible, and force insurers to bear the administrative burden of dealing with issues such as liability and conflicts over payments.

Personal injury protection (PIP) is required in some states, so in some cases drivers have no choice but to carry this form of auto coverage. But in the states where PIP is optional, it's certainly worth considering.

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