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PIP, or personal injury protection, insurance will most often come up in discussions with car insurance companies in no-fault states like Minnesota, where the coverage is mandatory. PIP will pay for your and your passengers’ medical expenses caused by an accident and related costs including lost wages. PIP is an important component in any insurance plan and should be thoroughly researched and carefully considered, even in states where it is not mandatory to have it.
What is PIP insurance?
PIP insurance is frequently referred to as “no-fault” insurance. PIP pays medical expenses and related costs arising from your own injuries and those of your passengers, whether you are at fault in an accident or not. PIP is designed to pay for these critical costs promptly, instead of requiring a driver to pursue a claim against the other driver (or their insurance company). The no-fault approach can spare accident victims the need to file a lawsuit or initially pay their own expenses out of pocket.
PIP insurance is not to be confused with your liability coverage, which is designed to cover medical expenses and claims for injury incurred by other drivers and their passengers involved in a car accident with you. Your policy’s collision and comprehensive coverage covers property damage, not your medical and other personal losses.
How does Minnesota PIP work?
Because PIP insurance covers only your own injuries and those of your passengers, you may want to file your own PIP claim with your own insurance company as soon as possible following an accident in which injuries (or suspected injuries) occur. Each insurance company will then pay their insured’s damages. In Minnesota, PIP can cover:
- Medical expenses, including the cost of surgery and hospitalization
- Ambulance costs
- Rehabilitation, including chiropractic services
- Corrective dental services
- Lost income
- Related expenses such as child care
A significant advantage of PIP coverage is the ability to immediately apply for funds from your insurer for medical care without the need to reach a settlement or prevail in a lawsuit with the other driver. For example, if you are in an accident and you and your passenger are injured, PIP can cover the costs of transportation to the hospital, medical costs and related costs, such as lost income due to missing work.
Is PIP required in Minnesota?
Yes, PIP coverage is required in Minnesota because it is considered a “no-fault” state. Each driver is obligated to have their own insurance to cover the costs related to their injuries that arise from an accident. This is where PIP comes in; it is considered an essential form of financial protection in a “no-fault” state.
Minnesota law sets minimum amounts of PIP coverage that drivers are required to maintain. The overall minimum no-fault coverage amount is $40,000. Note that this amount is payable to each person who may be injured in your vehicle as a result of an accident, including you. Of that amount for each person, $20,000 is allocated for medical expenses and $20,000 for non-medical expenses.
It is also important to note that there are limitations on when a Minnesota driver can file a suit against another driver who may be at-fault in an accident. PIP laws are designed to assure that coverage for most accidents is paid through PIP coverage without the necessity of litigation. However, an accident victim can bring a suit when accident expenses exceed $4,000, or the victim suffers 60 days of disability or permanent injury, or is permanently disfigured or disabled.
How much does PIP cost in Minnesota?
PIP is not different from other car insurance coverages in one respect. Prices vary dramatically from location to location and insurer to insurer. Other standard factors contribute to determining premiums, such as age and driving record.
With this said, in comparison to liability, collision and comprehensive coverage, PIP coverage typically costs much less. Pay particular attention to the impact that the deductible has on the premium. Often, opting for a higher or lower PIP deductible can have a significant impact on your premium.
Key things to note about PIP insurance in Minnesota
- PIP insurance is required by law to be maintained by Minnesota drivers.
- PIP is a no-fault state and mandatory PIP coverage helps the state achieve the goal of prompt payment of medical expenses and related costs without regard to fault.
- PIP insurance will pay for a wide range of costs beyond medical expenses incurred as the result of an injury such as lost wages, day care required and death benefits if applicable.
- PIP insurance does not cover pain and suffering.
Frequently asked questions
How and when do I file a PIP claim?
You can file a PIP claim immediately after an accident if necessary, or along with any other car insurance claim you might file following an incident. When reporting the claim, make sure you ask about necessary filing forms and procedures. In most cases you can do this by phone or online. Insurance companies have different time limits for filing a PIP claim and you should ask about this as well.
Are PIP and medical payments the same?
There are important differences. Medical payments are designed to cover only your medical expenses and those of your passengers injured in an accident in your vehicle. PIP does include medical payments, but also will cover other documented losses such as your lost wages.
Do PIP payments need to be repaid from a settlement?
Yes, typically, you are not entitled to a double recovery. If you receive funds in a settlement or from a favorable ruling in a lawsuit, you will likely need to repay amounts which you received from PIP for identical losses or costs.