Personal Injury Protection vs. Health Insurance

You may think that having personal injury protection and health insurance is unnecessary, since it seems like they might cover the same thing. There are some differences in how personal injury protection (PIP) works and how health insurance works, however. Personal injury protection will cover lost wages and other costs that would not be covered by even the best health insurance. PIP covers some or all of the funeral expenses if necessary as well. You might be required to carry PIP insurance, but you might save on health insurance premiums by adding cheap personal injury protection even if you aren't required to.

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Chris Tepedino is a feature writer that has written extensively about auto insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and Cinncinati.com. ...

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Reviewed by Rachael Brennan
Licensed Insurance Agent

UPDATED: Sep 9, 2020

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People in the US purchase health insurance for one very specific reason: to make sure that they don't suffer financial ruin in the event that something goes catastrophically wrong with their health. Similarly, motorists purchase auto insurance to protect themselves from financial ruin in the event that something goes catastrophically wrong behind the wheel.

However, there is a territory where these insurance policies can overlap. So in the event that something goes catastrophically wrong behind-the-wheel which also affects your health, what do you do? If you have Personal Injury Protection (PIP) and health insurance, it can be important to know when to use one versus the other.

Well, we're about to tell you. So whether you've already been in an accident and you're looking for answers, or whether you want to know in advance just in case something happens to you, you've come to the right place. If you need to increase your auto insurance coverage, you can use our FREE comparison tool to start your search right now.

Table of Contents

When to use PIP (Personal Injury Protection) Over Health Insurance

The answer to this question can vary greatly depending on which state you live in. In 12 US states, personal injury protection is a state-mandated form of coverage that you must purchase in order to drive legally. Those states are: North Dakota, Minnesota, Michigan, Utah, Kansas, Hawaii, Kentucky, Florida, Pennsylvania, New Jersey, New York, and Massachusetts.

Average Monthly Auto Premium (No-Fault States)Legend: Average Monthly Premium North DakotaMinnesotaMichiganUtahKansasHawaii 153045607590105120135150165180195210$133$106$216$109$119$118

If you live in a state where PIP is mandatory, it may make more financial sense to use that before you start dipping into your health insurance benefits. This is especially true if you have a health insurance plan with high co-pays and high deductibles. Your PIP coverage does not come with any of these additional fees. furthermore, if your PIP benefits start to run low but you still have medical expenses, you may be able to use the last bit of your personal injury protection benefits to pay for any upcoming medical co-pays and deductibles. Naturally, as with all things insurance, you may see a rise in your premiums as a result of filing PIP claims. However, this could be an effective strategy for putting off difficult financial burdens while you focus on taking care of your health.

Average Monthly Auto Premium (No-Fault States)Legend: Average Monthly Premium KentuckyFloridaPennsylvaniaNew JerseyNew YorkMassachusetts 20406080100120140160180200220240260280300320340360380400$133$171$90$109$402$118

If you live in a state where personal injury protection is not mandatory, but it is a part of your comprehensive policy, then feel free to take advantage of the extra coverage if it makes the most financial sense in your situation.

The only states where there may be exceptions to this rule in Michigan, and New Jersey. In the Garden State, you have a legal option of choosing your health insurance as the preferred method for taking care of your medical costs and setting up your PIP as a type of supplemental coverage. And Michigan, on the other hand, you have the option of delegating which form of insurance covers specific financial needs. for example, you could ask your auto insurance company to pay for lost wages or potentially expensive Rehabilitation costs from your PIP coverage. Meanwhile, you can use your health insurance to pay for expenses such as hospital stays and doctor visits.

Average Monthly Auto Premium: Fault vs. No-Fault StatesLegend: Average Monthly Premium North DakotaVirginiaMichiganWashingtonKansasVermont 102030405060708090100110120130140150160170180190200210$133$87$216$112$119$86

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What to Do If You Do Not Have Personal Injury Protection

If you do not currently have personal injury protection on your automotive insurance policy And the accident was deemed your fault, then you really have no other choice than to rely on your health insurance. But if you are not at fault, and you do not have PIP, Then you do have one additional option. Then the option is to file a third-party claim with the insurance company of the at-fault driver.

A word of caution first: even when you're in good health, filing a third party insurance claim is a particularly nasty uphill battle. You have to understand; it's in the other insurance companies best interests to make sure that they pay as little as possible. Many of the more ruthless agencies will do what they can to avoid paying you at all. Your best bet is to make sure you stay on top of all your paperwork and documentation, and also make sure you know what your deadlines are for filing claims and handing over proof. If it all becomes too overwhelming, don't be afraid to hire a personal injury lawyer.

To PIP, or Not to PIP?

Some of you out there may be thinking to yourselves "well, I don't live in a PIP mandatory state, and I have great health insurance, so I guess I can save money on my insurance premiums by removing personal injury protection from my auto policy." Unfortunately, it's not quite that simple. Yes, you may save money on your auto premiums overtime. Based on average rate differences between car insurance policies with and without optional PIP coverage, the chart below estimates how much you might be able to save on premium payments over the life of your car.

Monthly Premium 5 Year Cost 10 Year Cost
With PIP $71 $4,260 $8,520
Without PIP $52 $3,120 $6,240
Price Difference $19 $1,140 $2,280

But spending an extra few dollars a month for optional PIP coverage could make a huge difference if you do get into a catastrophic accident. For starters, health insurance will not pay for things like lost wages or, in a worst-case scenario, funeral costs. You and or your loved ones will be responsible for those financial burdens. furthermore, if your health insurance provider denies you a claim for medical expenses related to a serious car accident, you won't have any other recourse; you'll be stuck paying those bills 100% out of pocket.

Personal injury protection, on the other hand, does pay for those extra things. It will provide you with financial help if you lose income because you're unable to work; it will pay some if not all of your funeral expenses depending on the amount of coverage you purchase, and it will be there as a financial backup if your health insurance company denies your medical expense claims (those that are related to the accident, that is).

No one ever plans on getting into an accident. We all give the benefit of the doubt and assume that we are all good drivers. But all too often in life, events happen that we do not adequately plan for.

In the event of a catastrophic accident in which you severely injured, unable to work, or your loved ones are left holding the bag while planning for your unexpected funeral, personal injury protection can either supplement your current health insurance, protect you from financial ruin if you don't have health insurance to rely upon, or save you from an uphill battle when filing third party claims. And if you want to know which auto insurance companies are the best at providing you with adequate PIP protection (among other things), use our FREE tool to compare multiple rates now.

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