Many drivers are unaware of an important feature on their auto insurance policies that can help save them thousands of dollars in the aftermath of an accident. Personal injury protection (PIP), also sometimes referred to as “no-fault” coverage, can help cover the cost of medical expenses, lost wages, and other damages if you’ve been injured in a car accident. Here’s a rundown of what you need to know about PIP coverage.
What is PIP?
Legally defined, personal injury protection consists of provisions of an automobile liability insurance policy that provide for payment to the named insured in the policy, members of the insured’s household, and any authorized operator or passenger of the named insured’s a motor vehicle, including a guest occupant, of all reasonable expenses that:
- arise from an accident;
- are incurred not later than the third anniversary of the date of the accident; and
- are for:
a.) necessary medical, surgical, x-ray, or dental services, including prosthetic devices and necessary ambulance, hospital, professional nursing, or funeral services;
b.) in the case of an income producer, replacement of income lost as the result of the accident; or
c.) in the case of a person injured in the accident who was not an income or wage producer at the time of the accident, reimbursement of necessary and reasonable expenses incurred for essential services ordinarily performed by the injured person for care and maintenance of the family or family household.
Is PIP coverage required?
Insurers in Texas are required to provide PIP coverage unless the person being insured expressly rejects it in writing. As a driver, you are not legally required to have PIP coverage, but, as you’ll see, there are many benefits and it is in your best interest to accept your insurer’s PIP coverage.
What are the benefits of PIP coverage?
If you’ve ever been in a car accident, you know how frustrating it can be to play the waiting game while the insurance companies duke it out over who was at fault. But if you have PIP coverage, fault does not need to be determined, so you can receive your benefits as soon as possible, and you’ll only have to communicate with your insurance company.
How is PIP different from medical payments coverage?
Medical payments coverage also covers the medical costs incurred after a car accident, regardless of who was at fault. But PIP coverage also covers additional costs that medical payments coverage does not, such as lost wages and rehabilitation services.
What is the minimum coverage amount?
According to the Texas Department of Insurance, an insurance company must offer you $2,500 in PIP, but you can buy more. PIP coverage can go toward your medical, rehabilitation, and funeral costs, plus 80% of lost income and the cost of hiring a caregiver for the injured person.
How do you receive PIP benefits after an accident?
You are eligible for your PIP coverage regardless of who was at fault in the accident. Before you can collect your benefits, your insurer may require you to submit your medical bills and/or proof of lost income (note that proof may be required by the insurer no later than six months after the loss was incurred). Once you’ve presented all the necessary documentation to the insurer, they will pay you within 30 days.
Can benefits be denied?
Yes, PIP coverage may be denied if the insured intentionally caused the act that resulted in the injury or if the injury was sustained while the insured was committing a felony or attempting to allude lawful apprehension by a law enforcement official.
How will payment of PIP benefits affect the rest of your claim?
If you seek additional benefits from other sources within your own policy, your insurer is entitled to an offset in the amount of the PIP benefits. However, the offset is not applicable to other automobile or health insurance carriers.
What to do if your insurer fails to pay your PIP benefits
If the insurer fails to pay the benefits when they are due, the insured may bring a breach of contract action to recover the benefits. In addition to the benefits due, the plaintiff may recover reasonable attorney’s fees, a penalty of 12%, and interest at the legal rate from the date those amounts became overdue.