Many people look at their insurance options and wonder whether it would be a smart idea to waive PIP (Personal Injury Protection) from their coverage. Although it cannot be waived in every state, there are some states that permit you to waive it from your overall coverage. If you do decide to waive it though, there are always going to be consequences as a result. In order to find out whether the benefits of waiving your PIP insurance outweigh the risks, continue reading this article.
What is PIP car insurance coverage?
An example of when PIP is needed
Hopefully you are aware of what PIP coverage entails. If you aren’t, it is important to know that PIP insurance is responsible for covering medical expenses resulting from an accident. For example: Let’s say that you were involved in a serious accident and had to go to the hospital for immediate medical attention following the crash. If you racked up over $20,000 in hospital bills as a result of your accident, your PIP insurance would take care of most (if not all) of your expenses.
Why some people may want to waive their PIP coverage
Some people do not want to pay for full PIP coverage though because it does cost more money on their premiums. Not everyone can afford the best coverage and to maximize their limits in all aspects of insurance. If you are a person that is trying to maximize savings by reducing your coverage limits (as opposed to upgrading your car insurance), it’s important to weigh the pros and cons of cutting your personal injury protection (PIP).
How much PIP insurance do I need?
Look at your state insurance requirements
Many people want to know how much overall PIP coverage they need for their insurance policy. Some states require you to take out a minimum of PIP insurance so that you do have coverage in the event of an accident. If you were hoping to fully eliminate PIP from your coverage, you may be completely out of luck because the legal state requirements may specifically mandate that you still have a certain amount.
Do you live in a no-fault state?
Most people know whether they live in a state where there are “no-fault laws” in place. No-fault simply means that no matter which driver is at fault for the accident, your own insurance company needs to pay for your own medical expenses up to certain limits. Only when these limits are reached is when you can file a car insurance accident settlement in court. If you live in a no-fault state, you are generally required to have PIP insurance – so don’t think you will be able to legally waive coverage.
What if you already have great health and medical insurance?
If you are a person that has top-notch health insurance, and know that you will be covered if you get into a car accident, you may want to waive your PIP insurance completely. If you live in a no-fault state, you will not be able to cut it completely from your policy, but you will be able to get the bare minimum amount. It is recommended to lower your PIP coverage to the minimum if you have great health and medical insurance. By lowering the amount of PIP that you are currently buying, you will be able to lower your total insurance costs as well.
3 Questions to ask before deciding to drop or reduce your PIP insurance coverage:
1. Do I live in a state where I can legally drop or completely waive my PIP coverage? – If you live in a state where all drivers are required to have PIP insurance, you won’t be able to completely eliminate it from your policy. However, you can always reduce the amount of coverage you buy to the minimum if you want to reduce your expenses under this insurance option.
2. If lowering my PIP coverage, do I have good health insurance as a back up? – If you are lowering the amount of PIP on your policy, it is important to make sure that you have good health insurance with advanced medical protection. If you don’t have good health insurance and reduce your PIP – you could run into serious problems if you end up in the hospital from a car accident.
3. What does my insurance company recommend? – In order to find out what your insurance company recommends, it’s important to give them a call and ask. They will be able to tell you what other drivers are doing in similar situations and whether you should downgrade your PIP insurance.
Hopefully you learned what to do if you would like to reduce PIP insurance or waive it from your policy completely. Keep in mind that different insurance companies have different requirements, recommendations, and pricing options for their coverage. If you would like to see how other insurance companies compare in terms of price to the company that you are currently insured through, be sure to use the free quote tool at the top of the page. All you have to do is enter your zip code to see all of the best companies in your area.