When shopping for auto insurance in Maryland, you’ve probably came across personal injury protection (PIP) coverage included with most policies. From first glance, it seems redundant because you are also buying bodily injury coverage—so what’s the difference? Freedom Insurance Agency is here to help you understand exactly what type of coverage you are purchasing when you are opting in for PIP.
What Does PIP Insurance Cover?
Depending on the type of coverage you purchase, PIP may cover some or all of the following:
- Up to 80% of your medical expenses related to the accident
- Funeral costs
- Lost wages
- Rehabilitation costs
- Costs of hiring replacement services if you are unable to perform certain tasks due to your injuries.
- Survivor’s loss
If you purchase full rather than limited PIP coverage, your policy will provide the above benefits to you and any passenger of your vehicle who suffered injuries.
Why is There a Need for Personal Injury Protection?
PIP insurance is also known as “no-fault” insurance, which basically sums up its purpose. In a typical auto accident scenario, you would expect your damages to be covered by the other driver’s insurance if they are at fault. This is true for states that recognize fault in auto accidents, such as Maryland.
But what if you are the one who is at fault? Or what if it takes months to receive reimbursement from the other driver’s insurance company? Your injuries can’t be left untreated and bills, that often add up to thousands of dollars, will need to be paid. This is when PIP insurance is very effective in providing you with fast relief of financial troubles. Without PIP, you might end up exhausting your savings account just to pay for healthcare.
Can I Still Get Compensated by the Other Driver?
One of the great benefits of PIP insurance is that it allows you to collect twice for the same expenses. You can use it immediately after the accident to pay your bills. And if later on the other driver is determined to be at fault, you will also collect any damages awarded by their insurance provider.
What if I have Med Pay Coverage or Good Health Insurance?
It’s true, you can purchase medical payment coverage and not worry about medical bills in case of an accident. Or you might have good health insurance that will cover most of your accident-related injuries and ongoing treatment. While both of these options are great, they are focused solely on covering your medical bills. But you have other bills too, from mortgage to cellphone, that need to be paid as well. And the fact that you have to take off work to recover doesn’t help.
But if you had PIP insurance, your lost wages and certain other expenses would be covered. Yes, it may overlap in some aspects with med pay and health insurance, but in the end it’s better to have more coverage than you need than to be under-insured.
How Much PIP Coverage Should I Get?
If you decide to get PIP coverage as a driver, the typical auto insurance policy in Maryland will require a minimum coverage of $2,500 and will keep you covered for as long as 3 years. This may or may not be adequate for your needs. The best way to asses the necessary coverage is to talk to your Maryland auto insurance agent who can help you evaluate your other sources of income and overlapping insurance.
Keep in mind that PIP coverage is not required in Maryland, but insurance companies are required to offer it, so it would typically be included in a standard policy. If you don’t want it, you would have to sign a waiver for yourself, other named drivers and members of your immediate family aged 16 or older. But you can’t waive the PIP coverage for passengers, pedestrians and kids under 16.
Give us a call or contact us online if you have other questions about personal injury protection or other types of auto insurance coverage.