Auto Insurance and PIP, Who Needs it?
October 27, 2008 by Cameron Wong
Most drivers never look through their auto insurance policies. It’s understandable considering it’s full of jargon and legalese. However over the years, there’s been a debate on a three letter word found in most Washington car insurance policies; PIP.
PIP = Personal Injury Protection
Not all states offer PIP, but in Washington State it’s preferred not required.
In general terms PIP would cover things like, other people in your car, medical payments, lost income, and services needed if you had an accident.
Having good healthcare makes all the difference in PIP. Health insurance would cover a driver in the event of a bad accident. However, PIP goes beyond the medical bills and supplements the overall policy. If a driver were to be out of work for a time because of an accident, PIP would cover an amount of the lost wages. It fills in many of the blanks to a policy. However, the question among savvy car owners is, do we need PIP?
“It all depends on the type of driver you are and what type of health care you have,” explains Wilson Hui, and Allstate insurance agent from Redmond. “If you drive by yourself most of the time, never get in accidents, and you have good health care through your employer, then you might not need it. But if you’re always on the road, transporting people and you’re self employed, it might be good to have. For as little as you pay for it, most drivers have some PIP. It’s too cheap not to.”
Cost of PIP
Depending on the insurance company, PIP can be as cheap as a few dollars a month. That’s why the majority of drivers in Washington State have it. While there are no requirements, if a driver doesn’t want PIP, they must actually reject it when signing their policies.
“We (agents) leave it up to the drivers themselves,” says Hui. “Most of the policy holders I’ve come across see the value in it and have at the very least the minimum. But is it a money maker for insurance companies? Yes. But it’s not a big money maker. I have PIP myself, absolutely I do.”
How much PIP Do You Need?
Depending on the type of driver will determine the amount of PIP needed in a policy. While the standard extra coverage of PIP in Washington State is $10,000 – $35,000; there are others who would prefer to buy more. PIP could be the extra security some drivers feel is necessary before getting in a car.
“Some people just gotta have it,” says Hui. “Smart people weigh out what you pay and what you get. To get that extra $35,000 in coverage would cost you maybe four or five extra bucks a month. You might not need PIP, but why not get it? For a few dollars, it’s a good deal.”
In my opinion, if you have medical insurance, you won’t need PIP coverage. Working in a PI firm, I’ve seen many times where auto insurance companies were very tight when it came time to pay medical bills under the PIP coverage. As a result, you end up with thousands of dollars in medical costs that need to come out of your own pocket or else you’ll end up in collection. My advice, if you have medical insurance, use it!
As an insurance agent I carry $35,000 PIP and anyone who can afford it but does not carry it is a fool.
Not only does it become primary insurance for medical bills after an accident, it also pays up to $700 per week for work loss (disability) subject to a maximum of $35,000. If you broke both your arms and could not work, how would you pay for groceries and housing? Buy PIP!
PIP is particularly created to benefit the driver and possibly passengers. Personal Injury Protection is one of the few products in the auto insurance market where the buyer can really assess what they need based on insurance they already have. It’s better to carry PIP insurance with you anywhere. It will help you with some medical payments in the event of an accident.