Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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UPDATED: Oct 18, 2021

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A PIP (Private Injury Protection) Waiver is a document some states require you to sign if you do not want PIP insurance. In some states, an insurance company is required to try to give PIP insurance to all of their customers whether they want it or not. While drivers are not legally bound to have PIP insurance, in order to refuse the coverage, they must turn it down in writing via a PIP waiver.

To find the auto insurance coverage you need without the coverage you don’t, type your ZIP code into the FREE search box found here!

There are consequences for an insurance company if they fail to collect a PIP waiver from a customer who refuses the coverage. If that customer becomes injured in a car accident and the insurance company is not able to show authorities a signed waiver, the insurance company will have to provide PIP coverage for the medical expenses.

Personal Injury Protection Insurance

PIP coverage is a type of auto insurance coverage that may cover medical costs, rehabilitation costs, loss of wages, loss of service, or funeral expenses. The insurance will cover you and all of your passengers in the event of an accident, no matter who is determined to be at fault in the accident. The insurance is limited to the dollar amount of coverage that you choose. PIP insurance does not cover property damage.

According to this office, the Office of the Washington State Insurance Commissioner, there are several situations in which PIP coverage does not apply. PIP insurance won’t cover farm equipment, off-road vehicles, mopeds, motorcycles, and recreational vehicles. It also does not apply for injuries or damages that are experienced while racing or committing a felony and the insurance will not cover intentional damages. Other states have similar rules for PIP insurance.

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No-Fault States

PIP insurance is used in no-fault states, which are states that do not make you prove who was at fault in order to collect money for injuries in an auto accident. The idea is that every driver has the opportunity to purchase their own PIP insurance, and that insurance will pay for the people in their car who are injured in an accident, so that there is no reason to sue other drivers for injury damages.

In most no-fault states, you are not allowed to sue other drivers for medical expenses, but there are exceptions for severe injuries. Some states define the severity of the injury by a dollar amount for damages, some by a verbal description, and some states use both.

According to FreeAdvice.com, there are 12 states that currently have no-fault insurance laws, including Florida, Kansas, Hawaii, Kentucky, Michigan, Massachusetts, Minnesota, New York, New Jersey, North Dakota, Utah and Pennsylvania.

In addition, the states of Arkansas, Maryland, Washington D.C., and Delaware have add-on no-fault insurance laws, meaning that people can buy no-fault insurance, but they can still sue or be sued by other drivers for damages.

Amount of PIP Insurance Needed

Some experts suggest that PIP insurance is unnecessary if you are already covered by health, life and disability insurance, but this is not necessarily the case. Just because you have these insurance policies, it doesn’t mean that everyone in your car has them, so they could be left with no compensation for their medical expenses. Also, even if you have health insurance, the combination of deductibles and co-pays, coupled with the fact that the insurance rarely pays 100% of the medical bills, means that you could be stuck paying a lot of money out-of-pocket. PIP also covers some accident-related expenses that other insurance won’t, like lost wages.

The standard amount of PIP coverage that people take is often between $10,000 and $35,000. PIP coverage is relatively inexpensive, so if you think you need it at all; it probably makes sense to stay toward the high side of that range. You may want to consider getting more PIP insurance if you regularly carry a lot of passengers, as in a carpool situation.

You may not be aware, but there is a complementary relationship between health insurance and PIP insurance: if you do not have enough health insurance, you need more PIP insurance.

Other Ways to Pay for Car Accident Injuries

In states that are not no-fault states, the most common way to pay for injuries from a car accident is by collecting from the liability insurance of the driver who causes the accident. Of course, to do this, one must determine and prove who is at fault, which is often easier said than done. If the at-fault driver does not have insurance or does not have enough insurance, it will become necessary to sue them for damages.

There is no guarantee of success in a lawsuit, nor is there a guarantee that the defendant will have enough money to pay your medical bills if you win.

In the case where another driver is clearly at fault, but they don’t have enough insurance to pay for your damages, you could collect from your own uninsured or underinsured motorist policy. If there is no driver proven to be at fault in your accident and you do not have no-fault insurance, your options are more limited. In this case, you will need to rely on your own health, life, or disability insurance to cover your expenses.

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Insurance for Property Damage

Property damage claims are handled pretty much the same in no-fault states as they are in other states. If a driver is proven to be at fault in an accident, they, or their insurance, will pay for the damage to other vehicles and property. Most drivers carry liability insurance for property damage as well as personal injury, so liability insurance often takes care of damages for other parties, but not for the at-fault driver.

When an at-fault driver is uninsured or underinsured, the victim’s best bet is if they have uninsured or underinsured motorist insurance.

In this case, the victim’s insurance will cover the cost of the property damage and the insurance company may seek restitution from the at-fault driver later.

If the accident is your fault or if fault can’t be determined, there are still insurance options that can pay for the damages. Collision insurance pays for damage to your car in an accident under a variety of circumstances. According to an article on the Kiplinger website, collision will pay for damages to your car if you are at fault, if the fault is undetermined or if there is no fault. Even if there is no other driver, as in the case where you might hit a tree or a guardrail, collision insurance should cover the damages to your vehicle.

Collision insurance will pay for damages to your car if you think the other driver is at fault but it takes time to prove it. In this case, collision insurance is especially beneficial because it can save you from waiting until the resolution of a lengthy court case to get the money to repair your car. Some insurance companies will pursue the insurance company of the at-fault driver to get your deductible refunded to you after the case is resolved and fault is determined, too.

If your car is lost or damaged by something other than an accident, comprehensive insurance can help. Comprehensive insurance covers fire, theft, weather damage, and other various dangers that can affect a car.

Auto Insurance Requirements

There is some kind of auto insurance requirement in every state except New Hampshire. In most states, the requirement involves some type of liability insurance, but the exact requirements vary wildly from state to state, particularly in terms of the amount of minimum coverage required. Wisconsin, Alaska, and Maine require $50,000 in personal injury liability coverage per person and as much as $55,000 in liability coverage for property damage. Florida has the lowest requirement for personal injury liability with $10,000 while several states, including California and New Jersey, have a property damage liability requirement as low as $5,000.

According to an article in USA Today, insurance laws are largely ineffective, as evidenced by the fact that some states still have as much as 28% of their drivers uninsured. Some states like Massachusetts have had more success, keeping their uninsured rates down around four percent by requiring drivers to show proof of insurance before they can register a vehicle in the state. In Mississippi, where the uninsured rate is 28%, it is against the law to drive without insurance, but you are not required to show proof of insurance to police, which basically makes the law unenforceable.

Beyond the legal requirements, you might also be required to purchase additional auto insurance if you are financing a car, Since a financed car is the technically the property of the lender, the lender can tell you what type of insurance to get so  that they are satisfied that their investment is protected.

Most auto loan companies will require you to get comprehensive and collision insurance so that their investment is protected against virtually anything that could happen to the car.

If you need to protect your investment in your automobile, click here to type your ZIP code into the FREE search box now to get an auto insurance quote today!