What Is Personal Injury Protection (PIP)?

PIP pays your medical bills, lost wages and rehab costs after a car accident regardless of who caused it — and pays before your health insurance does.

It's required in 12 states. In optional states, whether you need it depends on your health plan deductible and income-replacement coverage.

Find out if you're overpaying for car insurance below.

Written by Mark Fitzpatrick

Updated: June 3, 2026

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PIP Auto Insurance: Key Takeaways

PIP pays your medical bills, lost wages, rehab costs, childcare and funeral expenses after a crash regardless of fault. It pays before your health insurance does.

PIP is required in 12 states: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah. If you're in one of these states, the question isn't whether to buy PIP — it's how much to carry.

In optional states, PIP is worth adding if your health deductible is $2,000 or more or if you have no income-replacement coverage while unable to work.

PIP limits range from $10,000 to $50,000. When that limit runs out, you pay the rest out of pocket or through health insurance.

What Is PIP Coverage?

PIP pays your medical bills and lost wages after a car accident no matter who caused it. Your insurer pays immediately without waiting to determine fault — you don't file through the other driver's insurance first. Bills are paid up to your coverage limit.

Here is what that looks like after a real accident. You go to the ER, the bill is $8,000, and you miss three weeks of work. Your $10,000 PIP policy pays the hospital bill and part of your lost income right away. You don't wait for fault to be sorted out.

What PIP Covers

Your medical bills
PIP covers emergency treatment, surgery, hospital stays and follow-up care after a crash regardless of fault. PIP pays before your health insurance in most no-fault states, which means it covers bills your health plan would otherwise make you pay first.
Lost wages
PIP typically pays 60% to 80% of your income while you can't work due to accident injuries, up to your coverage limit. If you earn $4,000 per month and miss three weeks, your PIP policy pays between $2,400 and $3,200 depending on your policy's replacement rate. No other coverage on your auto policy replaces your income.
Rehabilitation and physical therapy costs
Physical therapy, occupational therapy and other rehab costs are covered after the initial injury. These costs add up faster than most people believe and can last for months or years.
Child care and household services
If your injuries prevent you from caring for your children or managing your household, PIP covers the cost of those services up to your policy limit.
Funeral expenses
PIP covers funeral and burial costs in fatal accidents up to the limit in your policy. This applies to you and any passengers in your car.
Passenger injuries in your vehicle
Every passenger in your vehicle at the time of the crash is covered under your PIP policy regardless of fault.

What PIP Does NOT Cover

Injuries to the other driver. That's what bodily injury liability covers.
Damage to your car. That's what collision coverage covers.
Damage you cause to another driver's car. That's what property damage liability covers.
Costs above your PIP limit. You pay those yourself or through health insurance.
Work injuries covered by workers' compensation. If you're hurt in an accident while on the job, workers' comp pays first. PIP does not cover the same costs.

PIP vs. MedPay and Other Coverages

Many car insurance coverages start to sound the same. Here is how PIP differs from other similar coverage types:

MedPay also pays your medical bills after a crash no matter who caused it, but that's where the similarity ends. PIP also covers lost wages, child care and rehab. MedPay only covers medical bills. PIP costs more but covers more. If you live in a no-fault state and already carry PIP, adding MedPay is usually redundant.
Health insurance pays your medical bills too, but it takes time to process after an accident and may later seek repayment from the at-fault driver's insurance through subrogation — effectively reducing your net recovery. PIP pays immediately and also covers lost wages and childcare, which health insurance never covers.
Bodily injury liability pays for injuries you cause to other people. PIP pays for your own injuries and your passengers. They cover opposite sides of the same accident.

Do You Need PIP Coverage?

If you live in one of the 12 required states, the decision has already been made for you. PIP is mandatory in Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah.

Skip to How Much PIP Should You Buy?

If you live in an optional state, whether PIP makes sense depends primarily on your health insurance. Having health insurance does not automatically make PIP redundant. Health insurance never covers lost wages or childcare, and it takes weeks to process accident claims. Those gaps exist regardless of how good your health plan is.

Before waiving PIP, check your health plan's coordination of benefits language. Some plans require any available auto insurance PIP to be exhausted before they will pay accident-related claims. If your plan has this clause, waiving PIP in an optional state means your health insurer may deny the claim until fault is resolved, which is the opposite of what you intended.

Add PIP If:

Your health deductible is $2,000 or more.
You're paying your own medical bills after any accident until that deductible is met. A $10,000 PIP policy at $20 to $40 per month covers that gap and also replaces lost wages — which your health plan never covers. Drivers with high-deductible plans who skip PIP in optional states take on an average of $3,000 to $5,000 in out-of-pocket exposure after a serious accident.
You have no health insurance.
Without PIP or health insurance, every medical bill from an accident lands entirely on you. Even a $10,000 PIP limit covers most ER visits and follow-up care after a minor crash.
You are self-employed or have no short-term disability coverage.
PIP's lost-wage benefit is the only auto insurance coverage that replaces your income while you recover. If you can't work and have no other income protection, PIP fills that gap.
Your deductible falls between $1,000 and $2,000 and you have no short-term disability coverage.
The lost-wage benefit alone makes PIP worth the $20–40 monthly cost at this deductible level. The medical coverage is a secondary benefit.
You regularly drive with passengers.
PIP covers every person in your vehicle. If you carpool or frequently drive family members, a higher PIP limit protects everyone in the car, not just you.

You Can Skip PIP If:

Your health plan has a low deductible (under $1,000) and you have short-term disability coverage.
If your health plan covers most accident costs without significant out-of-pocket exposure and your employer covers lost wages, PIP duplicates coverage you already have.
You live in an at-fault state and already carry MedPay.
MedPay covers your immediate medical costs at a lower price. If lost wages are not a concern and your deductible is low, MedPay may be enough.

How Much PIP Should You Buy?

Start with your health plan deductible as a baseline. If your deductible is $3,000 and you have no short-term disability coverage, a $10,000 PIP limit covers your medical gap and gives you wage replacement room. If you are self-employed or earn more than $3,000 per month and would have no income replacement while recovering, go higher.

Most drivers in optional states who add PIP choose $10,000 in coverage — enough to cover a typical ER visit and short recovery, but not enough for a serious injury requiring surgery or extended rehab.

Drivers in high-litigation states like Florida and New York often carry $25,000 or more because medical costs in those markets reach the $10,000 floor quickly after any accident involving hospitalization. The difference between a $10,000 and a $25,000 limit is typically $10 to $20 more per month.

Frequently Asked Questions: PIP Insurance

What happens when my PIP limit runs out?

You pay the rest yourself or through your health insurance. In no-fault states you may also be able to file a claim against the at-fault driver once your PIP runs out, but only if your injuries meet your state's threshold for a lawsuit.

Does PIP cover me if I'm hit as a pedestrian or cyclist?

Yes in most no-fault states. If you own a car with PIP and get hit while walking or cycling, your own PIP pays your medical bills and lost wages even though you weren't in your car. If you don't own a car, the at-fault driver's PIP typically covers you instead.

Can I reject PIP in a no-fault state?

In most no-fault states, no. Michigan is the most flexible exception — drivers can opt out of PIP entirely only if they have Medicare Parts A and B, or employer-sponsored group health insurance that covers auto accidents. Individual marketplace plans and most short-term health plans do not satisfy Michigan's opt-out requirement.

New Jersey and Pennsylvania allow drivers to choose a limited tort option that reduces premiums but restricts the right to sue for pain and suffering after an accident. Unless you are certain you can absorb that restriction, the standard tort option is the safer choice.

Does filing a PIP claim raise my rates?

In most no-fault states, filing a PIP claim does not raise your rates. Some insurers do track claim frequency and may factor it into renewal pricing, so check with your insurer before filing a small claim.

Methodology

MoneyGeek's PIP rate data is sourced from Quadrant Information Services, which collects premium data directly from insurer filings with state regulators. Our analysis covers over 2.4 million quotes across 70 insurers and every residential ZIP code in the United States. Rates shown reflect a baseline profile of a 40-year-old driver with a clean record and good credit driving a 2012 Toyota Camry with 100/300/100 liability limits. The cost estimates cited for PIP coverage ($20 to $40 per month for a $10,000 limit) reflect the average premium change when adding PIP to a standard liability policy across this profile. For a full explanation of how MoneyGeek collects and analyzes insurance data, see our auto insurance methodology.

Sources

Michigan.gov. “What Is Personal Injury Protection (PIP)?” Frequently Asked Questions. Accessed June 2026.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty (P&C) Insurance Producer in Connecticut, is MoneyGeek's resident insurance expert. He has spent nearly a decade analyzing the market, first at LendingTree and now at MoneyGeek, where he produces original research on hundreds of carriers and millions of rates across auto, home, renters, health and life insurance.

He covers economics and insurance at MoneyGeek, and his work has been featured in The Washington Post, The New York Times and NPR, among other outlets.

Like all MoneyGeek analysts, he draws on independent cost and consumer experience data. No insurance company partnership influences his recommendations.

Mark holds a B.A. from Boston College and an M.A. in Economics and International Relations from Johns Hopkins University. He started his career in financial risk management at State Street and is also a five-time “Jeopardy!” champion.

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