Personal injury protection coverage (often known as PIP coverage) is an optional piece of your automobile liability insurance. It provides no-fault coverage for bodily injury-related losses. In Texas, PIP is mandatory unless the covered individual (the insured) signs a waiver to waive PIP coverage. Personal Injury Protection coverage can be an effective tool in recovering for losses sustained in a car wreck. Its use can be strategic in combination with other coverage. Today’s post will briefly discuss what PIP covers, how it relates to other forms of insurance, whether you need it and how you may want to use it in the event of a car accident.
What Personal Injury Protection covers in Texas
PIP covers medical bills for bodily injury related to a car wreck plus lost wages if the injured person is a wage-earner OR reasonable expenses incurred in household services if the injured person is not a wage-earner. To clarify that last aspect, if you are a homemaker/stay at home parent and injured in a way that prevents you from performing the tasks you normally do for home upkeep and you have to pay somebody to do those tasks for you then you can recover what it costs to hire people to perform those tasks.
In Texas the most common coverage amount for PIP is $2,500. Whatever you claim against your PIP coverage will apply up to the coverage limit. After you exhaust PIP coverage, the remainder of your claims will have to fall under some other coverage.
PIP coverage is no-fault insurance which means you can file claims against your PIP coverage even if you were 100% at fault for the car accident. So if you have PIP coverage then you should always request PIP coverage for medical bills and lost wages up to the maximum PIP coverage. If the insurer determines that you are not at fault for the car accident then it is up to your insurer to chase down the responsible party (or its insurer) to recover for what was paid on your PIP coverage.
How PIP works with other insurance coverage
Typically in a car accident with bodily injuries, you will file a claim against the other driver’s insurance policy. It is usually a good idea to file under PIP to get immediate payment of lost wages and medical bills. Let your insurance company recover what it paid down the road. The $2,500 might not be a lot when you have serious injuries but it can help. If you are in a car wreck with somebody without sufficient coverage then you may use your underinsured motorist coverage in addition to PIP. In Texas insurers can offset the PIP payment against your other forms of liability insurance.
Should you have PIP coverage?
Generally PIP coverage is a good idea. There are specific financial considerations in denying PIP coverage. If you are seriously considering waiving PIP coverage to save a small amount on your insurance bill then you should talk to a financial advisor about whether that makes sense for you. PIP coverage works extremely well in minor car accidents.
If you have PIP coverage there is little reason not to take advantage of it. PIP coverage will pay the medical bills even if nothing is wrong with you. It’s better to take advantage of the insurance coverage and find out you do not have any medical problems. You may discover down the road a minor medical issue developed into a more serious condition due to non-treatment.
An additional reason to consider PIP coverage is that you can file claims on PIP longer than most other remedies. In Texas the statute of limitations on a car wreck-related claim is two years. Generally you will have a hard time getting relief from the responsible party once you pass two years. PIP coverage extends to three years. In the event you have a lingering medical problem that requires medical care in that third year you can still come back around and file that claim on your PIP coverage before you hit the three year mark. May not be a major issue but it is a distinct advantage.