February 14, 2011

Deciding Whether Or Not To Purchase PIP Insurance

One of the most popular types of auto insurance coverage is personal injury protection, also known as PIP insurance. This coverage type pays for the medical bills and associated costs that a driver and his passengers take on in an accident in which he or she is at fault. For instance, if you have PIP insurance and you accidentally drive into another vehicle, PIP insurance will pay for medical bills that you and your passengers sustain during the accident under most circumstances (although car insurance exclusions may prevent a payout for drunk drivers or other extenuating circumstances). Personal injury protection is an important coverage for many drivers and is even required in states that operate on a no-fault system of insurance. If you have the option to either buy or refuse PIP insurance, there are a few things that you should think about before making your decision.

For one, you should consider whether any existing medical insurance that you own would cover your costs in an accident. In many situations, drivers are covered by their health insurance policies, and PIP insurance is unnecessary. Buying PIP insurance will never result in double coverage, so if you’re involved in an accident with both PIP and medical insurance, only one of the two coverage types will kick in. That’s unless the medical bills are extraordinary, in which case your medical insurance will pay for costs up to a certain point, after which your medical insurance will pay for the rest. You will have to pay deductibles and co-payments on each policy. For this reason, it may be unnecessary to buy PIP coverage if you already have another form of coverage that will handle your medical bills in an accident.

On the other hand, personal injury protection insurance doesn’t just cover the costs that a driver takes on; it also pays for the medical bills of a vehicle’s passengers. If you regularly carry passengers in your vehicle, PIP insurance may be a smart buy even if you have a very good medical insurance program. Otherwise, you may be liable for serious costs if an accident occurs. Think about how often you carry passengers before you decide not to buy PIP insurance.

Overall, personal injury protection is a very helpful form of auto insurance, and most drivers should consider at least minor coverage. However, it may be an unnecessary expense, and it certainly can inflate your auto insurance bills. Think carefully before buying PIP insurance and look online to gather quotes before you select a policy. Making a measured decision is always the best course of action, particularly where car insurance is involved.