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What is No-Fault Insurance?

Nov 23, 2020 - Car Accidents, Personal Injury

Personal injury protection (PIP), also known as “no-fault insurance” may help pay for medical bills, hospital bills, and costs not covered by your health insurance company If you’ve been injured in an auto accident.

PIP covers medical expenses no matter who is at fault. It can often include lost wages as well. Depending on the state where you live, PIP may be available as insurance coverage or as a required policy add-on. This coverage could help even if you’re not in your car. So, for example, if you’re injured by a car while walking down the sidewalk or riding your bike, or even riding in someone else’s car, PIP may have you covered up to the limits you choose, depending on the state.

PIP coverage is considered a first-party benefit; i.e., you receive compensation directly from your own insurance company if you are involved in a car accident. In contrast, third-party benefits are those that are paid to injured parties by the other driver’s insurance company.

If you have suffered a personal injury in an accident, contact an Easton accident attorney at Drake, Hileman & Davis to see what kind of compensation you are entitled to.

Which States Are PIP/No-Fault Insurance States?

States come in three varieties: those states where PIP is required, those states where PIP is offered but not required, and those states where PIP is not available. The states where PIP is required include:

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

The states where PIP is offered but not required include:

  • District of Columbia
  • New Hampshire
  • South Dakota
  • Texas
  • Virginia
  • Washington

The states where PIP is not offered include all other states.

What is Required in Pennsylvania

PIP is required in many states, including Pennsylvania. Your PIP coverage will cover your personal injury medical bills even if you are at fault for the accident. Drivers in Pennsylvania are required to have a minimum PIP coverage of:

  • $5,000 medical benefits, 
  • $15,000 bodily injury liability per person, and 
  • $5,000 for property damage.

You can of course purchase higher coverage limits, but these are the minimums. Driving in a “no-fault” state like Pennsylvania with PIP coverage is deemed by many to be “fairer” by “spreading out the fault.”

The main purpose of PIP/no-fault insurance is to pay for personal injury bills through your own insurance and thereby avoid wasting time and money arguing about who is at fault between the parties. Instead of waiting to file an insurance claim with another driver, your PIP policy pays you faster.

Another advantage to PIP in Pennsylvania is that the coverage you purchase extends to the family members in your household and on your policy. If you are driving with other passengers and an accident occurs, your own personal PIP coverage will take effect. Next, a family member’s policy can be used.

What PIP Covers

Personal injury protection covers your medical expenses, regardless of who was at fault for an accident. PIP personal injury protection may also cover:

  • Lost Wages. If you are unable to work due to accident-related injuries, PIP may help you recover lost wages.
  • Substitute Services. If accident-related injuries keep you or those covered from performing household tasks, like cleaning or doing the laundry, PIP could help pay for substitute services, like a cleaning crew.
  • Funeral Expenses. If accident-related injuries result in death, PIP could help pay for funeral expenses.

What PIP Does Not Cover

  • Damage to Your Vehicle. Collision coverage (if you’ve added it to your policy) helps pay to repair your car if it’s damaged in a crash with another vehicle.
  • Vehicle Theft. No-fault insurance does not cover vehicle theft. Comprehensive coverage (if you’ve added it to your policy) helps pay to replace your car if it’s stolen.
  • Damage to Other People’s Property. If you’re responsible for a car accident, your property damage liability coverage helps pay for damage you cause to another person’s car or property, such as a fence or a structure.
  • Medical Expenses That Exceed Your Coverage Limits. No-fault insurance does not cover medical bills or lost wages that exceed your coverage limits. Some no-fault insurance states offer an exception, and you may be able to file a personal injury lawsuit against other drivers if they’re responsible for seriously hurting you or someone else in your car, or if your medical bills exceed a certain dollar limit.

How Much Coverage Do I Need?

If you and your family already have health insurance with good post-accident benefits, the lowest legally required PIP limits, as outlined above, may be sufficient. If you’d like the additional protection that PIP can provide, like lost wages and substitute services expenses, you can always increase your limits to meet your specific needs.

If you and your family don’t have health insurance or have a plan that doesn’t offer all the benefits of PIP, it might be in your best interest to get as much PIP coverage as you can afford. Consider the financial impact of an injury-causing car accident when deciding on your PIP limits.

Penalties

In Pennsylvania, unless you operate a motorcycle, it is illegal to drive without PIP coverage. If the Pennsylvania Department of Transportation (PennDOT) finds you driving without PIP coverage, your ID, license plates, and registration may be suspended. Following this suspension, the driver would be required to pay fines, provide proof of insurance moving forward, and likely have a higher insurance payment.

Contact an Easton Accident Attorney at Drake, Hileman & Davis for More Information Regarding PIP

An Easton accident attorney at Drake, Hileman & Davis can help you sort through the complex maze of insurance and be sure your insurance company is paying out everything you are entitled to. We understand the law and can help you with all aspects of your claim. We work on a contingency fee basis, which means you pay nothing until you recover, and offer a free consultation. Contact us for further information.

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