Medical Payments & Personal Injury Protection
Unlike personal liability insurance (which is designed to cover damages to others), medical payments and Personal Injury Protection (PIP) coverage provide for payments to or in respect of yourself and your passengers in the event of a car accident.
Medical payments insurance is a basic level of coverage which pays for reasonable and necessary medical expenses or funeral expenses of the driver and passengers of a vehicle involved in a car accident, irrespective of who is at fault. Personal Injury Protection (PIP) is a more advanced level of insurance which provides all the basic medical payments coverage plus the following benefits:
- Rehabilitation expenses;
- Loss of earnings; and
- Replacement services, such as child care.
The availability of PIP coverage varies from state to state. In some states PIP coverage is mandatory, but in others it is a policy option, or not available at all. Certain states allow for the stacking of PIP limits, in which you can add together the PIP limits for each car you own. For example, if you own two cars and your PIP limit is $15,000 per car, then for the payment of an additional premium you can sum the two limits to give you a $30,000 PIP limit per accident.
Depending on whether you have separate medical and disability insurance policies, medical payments and PIP coverage ranges from moderately important to not important at all. In fact, you want it to be the latter, because then you will have in place comprehensive coverage for medical and other expenses irrespective of cause. The drawback with medical payments and PIP coverage under an auto insurance policy is that they only apply in the event of a car accident, which is a very limited circumstance given the wide range of possible injury causes.
So never take more medical payments or PIP coverage than you have to. Take the minimum coverage mandated by your state, then buy medical and disability insurance separately so you will have coverage not just for car accidents but for a much wider range of specified events.
