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Personal Injury Protection under No-Fault Automobile Coverage

Personal injury protection (“PIP”), also known as ”no-fault benefits” or first-party benefits, coverage is an extension of automobile insurance coverage. It pays, up to a certain amount, an insured’s health care expenses and other damages, like lost wages and income continuation benefits, due to an automobile accident regardless of who was at fault. Several no-fault automobile insurance states require drivers to carry PIP coverage. In some states, insurance companies are required to offer PIP coverage. Insureds can then purchase it, if they choose.

The theory behind personal injury protection coverage is to reduce the number of negligence accident cases involving minor injuries that are filed in the courts. By statute, an insured’s right to sue a person, who harmed the insured, is restricted to serious injury cases. Insureds without serious injuries are entitled to significant benefits under PIP that are designed to minimize the economic impact of the automobile accident and injury.

Personal injury protection coverage directly pays an insured’s bills for treatment of automobile accident-related injuries. It will pay the costs for doctors and other medical providers, hospitals, trauma centers, and necessary medical equipment. While PIP coverage provides valuable benefits, it has not always performed well. The goal of removing minor lawsuits from the courts has not been met because no-fault insureds can still sue if their claims are denied. Further, a high incident of fraudulent claims has been noted.

Personal injury protection coverage is only required by a limited number of states. The following states require PIP coverage: Colorado, Delaware, Hawaii, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, North Dakota, Oregon and Utah.