Personal injury protection insurance (PIP) is a type of no-fault car insurance available in 21 states but not in California. Instead, California drivers can purchase MedPay, an optional no-fault insurance policy that:
- covers the accident-related medical bills and funeral costs of you and your passengers (like PIP insurance), but
- does not cover lost wages (unlike PIP insurance).1
In addition, MedPay coverage kicks in when you and your family are injured
- as pedestrians hit by vehicles or
- as passengers in someone else’s car or public transportation.
Why is there no PIP insurance in California?
Since California is an “at-fault” state, the insurer of the at-fault driver pays for the other driver’s medical bills following an accident. This is as opposed to no-fault states, where drivers rely on their PIP coverage to pay for their own medical bills after an accident.
How does PIP insurance work?
Rather than figuring out who was at fault for the crash and then demanding compensation from that driver’s insurer, if you have PIP coverage, then you simply file a claim with your own insurer or insurance agent.
Unlike in California, there is no need to determine
- negligence,
- responsibility, and
- liability for a policyholder to file a claim.
What are the benefits of PIP insurance?
PIP simplifies the process of getting compensation and expedites the repayment process. Also, you do not have to deal with the other driver’s hostile insurance company that you do not pay premiums to, and you do not have to worry about the other driver being uninsured or underinsured.
Like MedPay in California, PIP can also help cover any payment gap from your health insurance policy’s deductible. It can also pay out once other forms of insurance have met their policy limits.
Different states handle PIP insurance differently. The specific terms of your insurance policy can also affect the scope and extent of your coverage. For example, in Florida, PIP insurance only pays for 80 percent of your medical bills and 60 percent of your lost wages.2
Does PIP car insurance cover me if I am not in a vehicle?
Like MedPay in California, PIP typically covers you if you are not in a vehicle (though insurance policies vary). This means you are generally covered in all forms of car accidents, even if you were hit and hurt by a motor vehicle while you were:
- walking,
- running,
- biking, or
- crossing the street.
Does PIP insurance cover all of my losses?
No, PIP insurance coverage is generally limited to your medical expenses and your lost wages. This means that it will not cover your:
- pain and suffering,
- loss of life’s enjoyments,
- loss of consortium, and
- property damage.
Your collision coverage would cover any property damage from the accident. These other forms of compensation are available in a personal injury case. However, PIP insurance coverage limits your rights to sue the negligent party.
PIP insurance also is not liability insurance. It is not a property damage liability coverage that would pay for damage to other people’s property. It is also not bodily injury liability coverage that would pay for any injuries you cause in an accident. It will not protect you from being held liable for these consequences.
Recall that in California, MedPay covers only medical expenses and funeral expenses, not lost wages like PIP insurance does.
Can I still file a personal injury lawsuit if I have PIP insurance?
It depends on the state. In states that require PIP insurance coverage, the rights to file a personal injury lawsuit after a car accident are often limited.
For example, New York is a state that requires drivers to carry at least $50,000 in PIP coverage.3 These drivers only have a personal injury cause of action if they suffer a “serious injury” in the crash.4 A “serious injury” is one that results in:
- death,
- dismemberment,
- significant disfigurement,
- fracture,
- loss of a fetus,
- permanent loss of use of a body organ, member, function, or system,
- permanent consequential limitation of the use of a body organ or member,
- significant limitation on the use of a body function or system, or
- a non-permanent injury that keeps you from performing substantially all of your customary daily activities for at least 90 of the 180 days after the accident.5
Other states may impose similar limitations on when personal injury claims can be filed.
In California, you can file a personal injury lawsuit whether or not you have MedPay insurance.
When does PIP not cover my vehicle?
Similar to MedPay in California, PIP insurance coverage has exceptions. If one of these exceptions is in play, PIP will not cover your medical expenses, lost income, or funeral expenses. The specific exceptions will be outlined in your insurance policy. However, the most common exceptions are:
- you were being paid to drive at the time of the accident, like if you were driving for Uber or Lyft, or
- you were committing a crime at the time of the accident, like fleeing from the police.
Additionally, PIP only covers car accidents. If your car was broken into or stolen, your PIP coverage will not apply.
Do some states have no-fault insurance?
Yes, some states (not including California) require all drivers to have no-fault, or PIP, insurance coverage. However, the details between states vary widely.
The following are some of the states that require drivers to have no-fault coverage:
- Arkansas,
- Delaware,
- District of Columbia,
- Florida,
- Hawaii,
- Kansas,
- Kentucky,
- Maryland,
- Massachusetts,
- Minnesota,
- New Jersey,
- New York,
- North Dakota,
- Oregon,
- Pennsylvania, and
- Utah.
However, each of these states has its own rules for personal injury protection coverage. Some of them differ quite substantially.
For example:
- Michigan generally requires all drivers to have at least $250,000 in PIP coverage.6 There are exclusions from this requirement for motorists who have other health insurance that would cover their medical costs, or if the driver is on Medicare or Medicaid.
- Kansas‘s minimum PIP limit only has to be $9,000 for medical expenses.7 This wide variety in required coverage limits can make a big difference in the outcome.
- Washington and Texas allow no-fault insurance as an optional auto insurance policy add-on.
Note that PIP insurance is not available in 29 states, including California.
What are the insurance requirements in California?
California requires all drivers to carry liability insurance with the following coverage minimums:
- $15,000 for the injury/death of one person in one accident;
- $30,000 for the injury/death of more than one person in one accident; and
- $5,000 for another person’s property damage in one accident.8
California also follows the pure comparative negligence standard, which allows you to recover damages even if you were partly to blame for the accident. The court would just reduce your financial recovery in proportion to your degree of fault.9
Legal References:
- See, for example, Dameron Hospital Assn. v. AAA Northern California, Nevada & Utah Ins. Exchange (Court of Appeal of California, Third Appellate District, 2022) 77 Cal. App. 5th 971.
- Florida Statute 627.736.
- New York Insurance Code 5102.
- New York Insurance Code 5104.
- New York Insurance Code 5102(d).
- Michigan Insurance Code 500.3009.
- Kansas Statute 40-3107.
- Insurance Requirements, California DMV.
- See, for example, Li v. Yellow Cab Co. (1975) 13 Cal.3rd 804.
