15 Jun What Is Personal Injury Protection?
You may have heard of or read about personal injury protection (PIP) and wondered, “What is personal injury protection coverage?” PIP is a type of insurance coverage that compensates you in the event of a car crash. A PIP policy pays you up to the policy’s limits, no matter who was at fault in the crash.
Unfortunately, personal injury protection policies are not available for purchase in the state of California. This does not mean there is no benefit to knowing about this type of coverage, though. Although PIP is not available for California drivers, a similar type of coverage — Med Pay — is.
You are not required to purchase Med Pay to drive in California, but you may find that this type of coverage gives you peace of mind when you are on the road.
Understanding PIP Insurance Policies
You may be wondering, “What is PIP?” To understand personal injury protection, you must first understand how states allocate responsibility for car accidents. Car accidents cause injuries and deaths in every state. But states generally fall into one of two categories when it comes to deciding who is responsible for paying the claims of victims.
In a no-fault insurance state, each injured driver is responsible for paying their own medical bills and the costs of their injuries. It does not matter who is responsible for causing the crash or who was negligent before the collision happened. If you are hurt, you submit a claim to your insurance carrier and they pay up to your policy’s limit.
Conversely, in an at-fault insurance state, the driver who is primarily responsible for causing the crash is responsible for the injuries that any other drivers or passengers suffer. These victims submit claims to the at-fault driver’s insurance carrier, which then pays the claims up to the policy’s limits.
Personal injury protection policies are required for drivers in no-fault insurance states. Drivers who get behind the wheel in an at-fault state will need to carry general liability insurance coverage. Both no-fault and at-fault states often have laws that dictate the minimum amount of coverage these policies must provide.
Personal Injury Protection Policies vs. General Liability Policies
So what is personal injury protection? It is a type of insurance policy that pays benefits to the policyholder in the event of a crash, regardless of who is responsible for causing the wreck.
There are significant differences between general liability policies and PIP coverage. One difference is who the primary beneficiary of the policy is.
For PIP insurance, the policyholder is the one who stands to benefit by filing a claim against the policy. Other injured drivers would be responsible for filing a claim with their own PIP insurance carriers. In this way, each injured party is responsible for their own expenses.
For general liability policies, whoever is injured by the policyholder’s careless acts is the one who stands to benefit from the policy. Suppose another driver runs a red light and crashes into you. You would file a claim against that driver’s insurance policy, and upon approval, that other person’s carrier would pay the claim up to the policy’s limits.
Another difference between general liability and PIP policies is the types of losses that are covered. General liability policies cover both damage to property as well as personal injuries. If the driver who ran the red light totaled your car and caused you injury, their insurance company would pay for your property damage along with your medical bills.
However, in a no-fault insurance state, your PIP policy would cover only your medical bills and other personal injury expenses. Your car’s damage would not be covered under your PIP policy, regardless of who was responsible for the crash.
To be compensated for your property damage, you would need to submit a claim to your comprehensive insurance carrier. Or you may be able to file a claim with the at-fault driver’s insurance company.
Benefits of a Personal Injury Protection Policy
There are certain advantages to having a personal injury protection policy.
Some of the first expenses you will incur after any car accident are medical expenses. These can include ambulatory costs if you have to be transported from the scene by an ambulance or helicopter. Once you are at the hospital, you will incur additional expenses as you are treated in the emergency room and possibly hospitalized.
While an at-fault driver may be responsible for paying these costs, determining who is at fault is not always immediately apparent. The insurance companies and their car accident attorneys may spend weeks or months combing over the evidence before they decide which party bears responsibility for paying the claims of others.
A PIP policy pays compensation for injuries no matter who is at fault. Even if you were the primary cause of the accident, your PIP policy would step in and pay your claim without having to determine responsibility. Because of this, the PIP claims process is often simpler than the general liability claims process.
Moreover, with a PIP policy, you decide how much coverage you believe you might need in the event of an auto accident. If you have certain medical conditions or are concerned about any out-of-pocket expenses you may have, you can elect to have higher coverage.
Conversely, if you believe your chances of being involved in a catastrophic accident are low or you have the means to cover your medical costs, you may elect for lower coverage and pay a lower premium.
At-Fault Liability Insurance in California
California has elected to follow the at-fault insurance rules. This means that if you get into a car wreck in California, whoever caused the crash will be responsible for paying costs related to your personal injury and any damage to your vehicle. To get compensation in this scenario, you would generally need to:
- Notify your own insurance carrier of the wreck
- File a claim for damages against the at-fault driver’s policy
- Speak with an insurance adjuster about your claim and your losses
- Reach a settlement or agreement with the insurance company
- Seek additional compensation through a claim against your policy or a lawsuit
Because the costs associated with a car accident can be significant, California requires all auto insurance policies to have certain minimum limits. These are:
- Up to $15,000 for the death or injury of any one person in a single accident
- Up to $30,000 for the death or injury of two or more people in a single accident
- Up to $5,000 for damage to another’s property or car in a single accident
Injured parties can file a lawsuit to pursue the difference between their losses and whatever expenses or losses exceed the at-fault driver’s policy limits.
What If There Are Multiple At-Fault Parties in a California Car Wreck?
In the event that you are also partly to blame for an accident that causes you injuries, California law holds that when multiple individuals are at fault, each at-fault party is assigned a percentage of the overall responsibility for the crash.
For example, a motorist who speeds through a red light and hits you while you are distracted by your cell phone may be 75 percent at fault, while you are deemed to be 25 percent responsible.
In this situation, the total damages you receive would be reduced by 25 percent to account for the role your own negligence played in the accident.
No PIP Policies Are Permitted in California
Since California has chosen to be an at-fault insurance state, you cannot purchase a personal insurance protection policy in the state. It follows, then, that insurance companies in California are not permitted to offer such policies for sale.
Because you cannot purchase a personal insurance protection policy, you are generally not responsible for the financial costs of an accident you did not cause. But this also means that you may have to wait before the at-fault driver’s policy will pay your claim.
Med Pay: An Alternative to Personal Injury Protection Coverage
Although Californians are not able to purchase a true PIP policy, there is an alternative that functions very similarly and provides some of the same benefits. This coverage is called medical payments auto insurance coverage, or Med Pay. Here are several details to note about how Med Pay works:
Med Pay Is Not Required Coverage in California
First, no California law requires you to purchase Med Pay coverage. As a result, there are no mandatory minimums that govern these policies. You are free to shop around amongst the insurers who offer this coverage and select the provider and policy that best meet your needs.
Med Pay Operates in a Similar Manner to PIP Coverage
Just as personal injury protection insurance benefits are available to the policyholder no matter who is at fault in an accident, the benefits of a Med Pay policy are also available to the policyholder regardless of fault.
If you have this coverage and are hurt, you submit a claim to your Med Pay carrier. The carrier will then pay your claim up to the policy limits you have selected.
Only Medical Costs Are Covered by Med Pay
Unlike PIP, which can cover not only your medical expenses but other costs like lost wages, Med Pay will cover only your medical expenses and those of any passengers in your vehicle who are hurt.
If any of you incur other damages like lost wages or property damage, you would need to find some other source of compensation for addressing those losses.
Med Pay May Have a Right of Subrogation
Just because Med Pay will cover expenses you incur does not mean that your Med Pay carrier will simply eat the expense. Instead, the Med Pay insurer may exercise its right to subrogation and recoup the expenses it paid to you from the at-fault driver’s insurance.
For example, suppose that you have a Med Pay policy with $5,000 in benefits. You are in an accident caused by a speeding, aggressive driver and must go to the hospital. There, you incur $10,000 in treatment expenses. You file a claim with your Med Pay carrier and against the at-fault driver.
In this scenario, your Med Pay carrier will likely pay your claim quickly since it is not concerned with fault in deciding whether to pay your claim. However, if you then obtain $10,000 in compensation from the at-fault driver’s insurance, your Med Pay insurer will recoup the $5,000 it initially paid to you.
You generally cannot receive your Med Pay benefits as well as the full amount of a claim filed against the at-fault driver’s policy.
Get Experienced Help Dealing with a PIP or Med Pay Policy
Any car accident can be complex, and cases involving an out-of-state PIP policy or a Med Pay policy are no different.
You may not know the full answer to “What is personal injury protection?” but the Law Offices of Steve Gimblin can help you make sense of it. We will also help you file the appropriate insurance claims and seek compensation from responsible parties.
If you have been hurt in a California auto wreck, give the Law Offices of Steve Gimblin a call right away.
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