Personal Injury Protection

Like any type of insurance, personal injury protection or PIP, has its benefits, but the question here is why it’s beneficial to you? You probably already have all types of insurance coverage, bodily damage coverage, comprehensive coverage, collision coverage and many others that you may get in one deal, so what is personal injury protection coverage and why would you need it?

PIP or medex as some may know it is a no-fault type of insurance. The idea behind it is to avoid lawsuits and of course to provide coverage for everything from medical expenses to lost wages. Depending on the state you are in personal injury protection coverage may be mandatory. Let us take a look at different aspects of personal injury protection.

Who is covered with PIP and what situations are covered?

This type of insurance covers almost every single accident possibility, with that being said policyholder, his or hers relatives from the same household, passengers in the vehicle, any other authorized driver and even a pedestrian struck by another vehicle are covered. The policy extends even to the policyholder and his relatives if they are injured while riding in someone else’s vehicle. This type of coverage is also beneficial for people that already have health insurance, maybe your passenger is not covered by health insurance, in that situation your PIP coverage will come in handy. Bodily injuries and medical costs are not the only things that are covered with this type of insurance.

Depending on the coverage you took everything from your lost wages, cleaning services and of course possible funeral costs are covered. Of course you should check with your insurance company what is offered and what types of coverage you can take.

As we said in the beginning some states have mandatory personal injury protection coverage, here is the list of 16 states that do:

  • Delaware
  • Hawaii
  • Arkansas
  • Kansas
  • Florida
  • Kentucky
  • Utah
  • Maryland
  • Michigan
  • Massachusetts
  • New Jersey
  • Minnesota
  • New York
  • Oregon
  • North Dakota
  • Pennsylvania

Types of Personal Injury Protection

Full PIP primary is the basic model of PIP insurance; it covers the damage and expenses for you and passengers in your vehicle. Funeral expenses, income continuation, death benefits and essential service expenses are covered with this option.

Full PIP health primary is purchased if you have another insurance company that is the primary health provider for any injuries you might sustain in a car accident. As with full PIP, health primary covers death benefit, funeral expenses, income continuation and essential service expenses. You must be aware that if you use Medicaid or Medicare as a primary health insurance or if you’re employed in the military, full PIP health is not available. You would do well to check what is already covered with your insurance, if you are uncertain then full PIP primary is your best choice.

Coverage included in Full PIP:

  • Funeral expenses – a maximum of $1,000 for funeral expenses will be paid if the individual covered by PIP dies from the injuries sustained in a car accident.
  • Death benefits – A maximum of $5,200 minus any income continuation paid to the insurer will be paid by PIP to the beneficiary if the insurer dies from the injuries sustained in a car accident.
  • Income continuation – This one is self explanatory, if the beneficiary of the PIP insurance is unable to work, then PIP will cover the income compensation.
  • Essential service expenses – If the accident caused any damage to you as the beneficiary or your relatives in the household is preventing you to perform certain tasks then PIP will pay for such services. The payout is limited to $12 per day up to total of $4,380.

Medical only PIP primary is the primary insurance coverage for any injuries your passengers or you sustained in a car accident.

Medical only health primary should be acquired if you have another insurance company as your primary health provider for injuries that were sustained in a car accident.

From the example of payouts above you may see that there is a maximum payout threshold for certain types of injuries and other situations. Depending on the state you are in, the maximum payout can go from $1,500 to $250,000. Which in most cases can be lower than medical or repair costs for major accidents, so getting another form of medical insurance may be a wiser option if you don’t wish to pay the exchange from your own pocket.

Personal injury protection helps the beneficiaries of such policy to reach the settlement quickly with no additional costs. Having PIP insurance eliminates the need for lawsuits and finding the guilty party. Filing a lawsuit against a person covered with PIP is only possible if injuries sustained meet a certain threshold, while in death situations lawsuit is almost always possible. PIP is there to limit the expense of your insurance and to provide additional coverage.

Liability Coverage

General liability coverage is a part of every car insurance policy, but the specifics of liability coverage are important to become acquainted with before you pick your policy. In every state, basic liability coverage is required to take your car on public roads and the monetary penalties can range from $500 to $3000 varying by state for being pulled over with no insurance. More importantly, repeat offenders may have their licenses revoked and their cars impounded at the owner’s expense. The potential for revenue loss in this situation is exceptional even if you don’t get in an accident.

If you do get in an accident, your business can be put at serious risk because all of your assets are considered fair game for remuneration of damages in a lawsuit. This includes future revenue for ongoing medical costs, property damage and punitive damages if you’re found at fault. A collision in your company car can sink a business with one fell swoop. Another important aspect about liability insurance is that more often than not, insurance companies will duke it out in court for you in order to limit your fault. Even if you are deemed partially at fault, it’s better for your driving record and future premiums not to be held fully liable for a traffic collision. In terms of insurance premiums, an “at fault” collision can raise your rates for up to five years.

The first step is to consider general liability coverage, but in your business, the general coverage might not be enough. For instance, if you have cargo that spills in an accident, any vehicle that is damaged by running into debris spilled onto the road is entitled to reparations at your expense. In this case, it’s very important to have cargo coverage that covers not only cleanup costs, but other vehicles that have sustained collateral damage surrounding the initial collision.

There is also bodily injury liability coverage, which covers any passengers if you, for instance, run a taxi service and end up with injured passengers at the fault of your employee’s driving.

Some of the vehicles you wouldn’t think to insure might end up on the road in the course of daily work. You may find that a trailer or a tractor used generally on your farming property might have to be driven on the road for any number of reasons. In the past, these slow-moving oversize-load vehicles have ended up in some nasty unexpected collisions. Regular car insurance doesn’t cover these vehicles and if they leave your land, they’ve got to be registered and insured with special vehicle coverage.

In a perfect world, your employees will only ever use the vehicles you entrust them with for business matters, but in the event that your trusty company man takes the car out to get groceries or even lunch, he’s not actually covered under your normal employee liability. Your business however, is still responsible if the company car ends up in a collision. If you have employees who spend a lot of time driving unsupervised, it’s a good idea to opt for a provision called “individual named endorsement” which will cover many nonstandard uses of the company vehicle that cannot be clearly established as “company business.”

Levels of coverage vary in differing policies. Make sure that your limit of auto coverage i s above the basic requirement as put forth by your state’s department of motor vehicles. The average minimum coverage requirement is $5,000 for property damage and $30,000 per collision for bodily injury coverage. If you think about it, $35,000 is hardly adequate coverage for a good pileup. Say one of your fine, upstanding employees is deemed at fault for a collision with a single family vehicle carrying four passengers. The other party’s car is totalled and while two of the family members only have some minor whiplash, scrapes and bruises, the two on the impact side sustained multiple fractures. Your employee requires no medical treatment, and that’s good because you haven’t opted for personal injury protection.

The ambulance ride x2 is $2800, and that’s before they even get to the hospital. After that, there’s surgery to set the bones, casting, medication, follow up visits, and physical therapy.  In the end, you’re looking at paying your deductable plus at least $20,000 that just isn’t covered by this skimpy limit. Fortunately, the average small business car insurance policy bottoms out at about $1,000,000 worth of coverage for a multi-car multi-driver package. While the premium for a business is a quite a bit higher than a personal coverage policy, the payout limit is exponentially higher, since many people rely on the assets of even a single business. In addition, there are tax breaks and discounts for businesses that support their employees getting the extra training for a commercial driver license because statistically speaking, people who drive with commercial driver license are less of a liability due to superior training and accountability.