Hello. My name is Nelson Abbot. I’m an attorney at Abbot Law Firm. I practice in the State of Utah and one of the questions we get frequently is what is PIP and what does PIP pay for?
What does the word “PIP” mean?
PIP is an acronym for a component in automobile insurance policy that stands for Personal Injury Protection. Sometimes people will refer to it as no fault insurance.
What does PIP pay for?
PIP pays a few things. By law, it has to pay a minimum of $3,000 in medical expenses that somebody incurs as a result of an injury that occurs in or around an automobile as a result of the operation of that automobile. So for example, a pedestrian might be or is eligible for PIP benefits if they’re hit by a vehicle even though they’re not an occupant. But normally we see most PIP benefits being paid for medical expenses somebody incurs because they’re an occupant of the vehicle that’s involved in a crash.
Another thing that PIP will pay for is $3,000 in death benefits. So if somebody were to die in a vehicle collision PIP would pay $3,000 to their heirs just because they died in the automobile collision. It will also pay $1,500 for funeral expenses, towards funeral expenses. Obviously that doesn’t cover the full cost for a funeral but it’s something. PIP will also pay for lost income. And it pays the lesser of 85% of the amount of income actually lost or $250 per week. So for a lot of people that are working full time and they have a good paying job they’re gonna max out at $250 per week or a $1,000 per month.
PIP will also pay $20 per day to hire somebody to do household services that you can no longer do because you’ve been injured in an automobile collision.
How much does PIP cost?
So how much does PIP cost? Well, PIP is not very expensive. Every automobile insurance company charges something a little bit different but let’s say an average might be $15 per month for the minimum policy limits required by law which is the…what I was just talking about, the $3,000. You can go higher though. You can get the next increment that a lot of people seem to get is $10,000 in coverage. So it’s basically just slightly more than three times as much and what they usually pay for that is about double the premium. So you get three times the benefit for double the premium.
It might be $30 a month for $10,000 in coverage but again every insurance company’s going to differ. You can keep going up and get higher and higher benefits. You can get $100,000 in PIP coverage and it doesn’t cost, you know, 30 times more. It actually gets cheaper and cheaper the more you get. So while $3,000 in benefits might cost $15 per month, a $100,000 policy might cost $75 per month. So you can see it’s a better bargain the more you get. The other advantage of getting higher PIP coverage is it just covers more. For example, $3,000 in medical expenses really doesn’t go that far anymore. These $3,000 were set a long, long time ago and nowadays a trip to the ER can easily cost that much money or more.
A medical helicopter will easily cost more than that and an ambulance ride can cost more than that in many situations.
I hope this answers some questions and clarifies some issues in people’s minds. If you have any more questions, we give free consultations for automobile accident cases. Just call our office, ask to speak to Nelson Abbot, 801-374-3000. Thanks.