Coverages Required By Law

Regardless of who may have been at fault, PIP pays up to a maximum of $250,000 per person, per accident, for the medical bills, lost wages and other costs associated with auto-accident injuries. Because benefits are paid regardless of who causes the accident, PIP is also known as "no-fault" coverage. PIP covers you and family members living in your household. Other passengers in the car at the time of an accident are provided for under their own automobile insurance policies and PIP coverage. If however, they lack auto insurance coverage, then they are covered by your insurance policy.

PIP coverage has two parts: medical expense coverage and extra PIP package coverage. PIP medical expense coverage pays hospital, doctor and other medical provider bills for treatment of injuries from automobile accidents.

Under a standard policy, individuals have the option of choosing among various levels of PIP coverage, including $250,000, $150,000, $75,000, $50,000 or $15,000. All the options include catastrophic-type injury coverage of up to $250,000. If an insured does not choose among these options, he/she will automatically receive the standard $250,000 of coverage.

Insurers will pay PIP benefits over the deductible amount chosen. PIP deductibles range from the minimum deductible of $250 and up to $2,500. After the deductible is paid, there is a 20% co-pay on medical expenses up to $5,000 after which the insurer pays 100%.

Extra PIP coverage is available under a standard policy only. It provides a package of additional benefits including income continuation, essential services, death benefits and funeral expense benefits. Consumers may choose not to receive the extra PIP package benefits and have only PIP coverage for medical expenses.

Consumers also have the option to have their PIP medical benefits provided by their auto insurer or their family's health insurance company. They can also select the amount of their deductible. The maximum deductible available is $2,500. State law requires them to pay a deductible of at least $250.

When a policyholder is involved in an automobile accident for which they are legally to blame, this coverage protects them against claims and lawsuits for injuries or death caused by their automobile. It also pays for a legal defense and settlement costs up to their policy limits. Under a standard policy, consumers are required to purchase BI liability coverage of at least $15,000 for injuries to one person and $30,000 for all injuries arising from a single claim. Higher limits are available.

This is like bodily injury liability coverage, except that it pays to repair damage to other people's cars or property caused by a policyholder's automobile. This type of coverage also pays for legal defense and settlement costs up to policy limits. The minimum amount of PD liability coverage required by the state is $5,000 per accident. Higher PD liability limits are also available.

This coverage reimburses the policyholder, their passengers and family members living with them for damages caused by other drivers who either have no auto insurance or have inadequate insurance coverage. Claims that they would have made against another driver who was at fault are paid by their policy up to the limits of their coverage. The uninsured motorist coverage may not have a limit higher than the person's own bodily injury liability coverage limit.

See Also:
Options Under a Standard Policy
Other Standard Policy Choices