Should You Get PIP or No Fault Insurance Coverage?

Typical car insurance, which may include collision coverage and personal liability insurance, covers repairs to your car and protects you from personal liability in the event of becoming an accident victim. It won’t cover some related expenses and if you’re in a serious accident, that can be a problem. It can even end up in a lawsuit, where the damages awarded might lead to significant financial hardship.

Increasingly, no fault states are requiring PIP (Personal Injury Protection) insurance to fill the gaps. We reached out to some experts to get their take on what PIP insurance pays for and whether you need it if you own a car. Here’s what they told us.

What Does Personal Injury Protection Insurance Cover – and What Does it Not Cover?

Let’s start by talking about what is covered (and not covered) by PIP insurance. Laura Adams is an MBA and an Auto Insurance Expert at She told us this:

"Personal injury protection (PIP) is required in some states that have no-fault insurance regulations. No matter who's at fault in a car accident, PIP covers expenses such as medical bills, funeral expenses, legal fees and lost income. Even if it's not required in your state, purchasing PIP can help you avoid financial loss after an accident."

All Florida drivers are required to carry $10,000 in PIP. The policy will cover personal injuries you receive up to the policy limit regardless of who is found to be at fault for the accident. This differentiates it from liability insurance, which covers your passengers and the driver and passengers of any car involved in an accident that you caused.

In addition to medical expenses your PIP policy will also cover expenses related to the injuries you received. That includes the following PIP benefits:

  • Rehabilitation costs. If you are seriously injured and need extensive rehabilitation or physical therapy, PIP insurance will cover it.
  • Lost wages. If you are unable to work due to your injuries, PIP insurance can provide some financial relief to you and your family.
  • Replacement services. If injuries prevent you from doing routine things for your family, such as house cleaning or child care, PIP insurance can pay for them.
  • Funeral expenses. When someone dies in an accident, PIP insurance may sometimes be used to pay for or offset funeral expenses.
  • Survivor benefits. If the money is not needed for other things, the coverage from PIP insurance may sometimes be given to the survivor of a driving fatality.

Not all of these benefits apply to every policy, so you should be sure to check with your insurance carrier and read the policy for details.

While PIP insurance is useful it does not cover every expense related to an automobile accident. Here are some things that are not covered by PIP insurance:

  • Damage to your car as the result of an accident. If your car is damaged, PIP insurance cannot be used to repair it. For that, you’ll need collision insurance.
  • Replacement of your car. If your car is totaled in an accident, you shouldn’t rely on your PIP Insurance to replace it. Instead, buy comprehensive car insurance.
  • Damage to another person’s car or property. PIP is only for injuries and the related items we listed already. Your property damage liability will cover damage to the other person’s car and belongings.

Why is PIP Required in No Fault States?

In the United States, 12 states are no fault states when it comes to car accidents. These states include the following:

  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Pennsylvania
  • Utah

In a no fault state, each accident victim is legally required to submit claims for injuries sustained in an accident regardless of who was at fault. Melanie Musson is a Car Insurance Expert at She explained the PIP requirement like this:

"If you live in a no-fault state, you’ll be required to purchase personal injury protection (PIP). If you don’t have the insurance that’s required, you’ll face legal penalties. PIP covers your injuries in an accident regardless of who is at fault. In no-fault states, each party involved in an accident pays its own injury costs. These laws are supposed to reduce the number of lawsuits following car crashes. Even if you’re not required to purchase it, you may decide to buy a PIP policy if you don’t want to depend on your health insurance coverage or if you don’t have health insurance."

As Melanie notes, the purpose of PIP insurance is to reduce lawsuits, as well as to provide drivers with some protection if they are injured on the road.

What Happens if You Don’t Buy PIP Insurance in Florida?

Florida requires drivers to buy a minimum of $10,000 in PIP and $10,000 in property damage liability. Let’s talk about what you can expect to happen to you if you don’t buy the required PIP coverage.

If you are stopped for a moving violation, the officer who stops you will scan your license plate. The scan will return a result that includes any information about you on file with the Division of Motorist Services, including your auto insurance information. Whether that information is on file or not, they will request your license, registration and insurance card.

If you cannot present an insurance card when asked, you will receive a ticket. For a first offense, the amount is $150. They will also submit a request to suspend your license and license plates. That might sound ominous, but you will have a window of opportunity to avoid these punishments.

The easiest way to avoid the punishment is go immediately to an insurance carrier, buy the required insurance, get your insurance card and go to the DMS to present it. If you take this step before the suspension of your license and plates has been processed, you can usually avoid paying the fine. 

You should know that being caught driving without a license in Florida is a second-degree misdemeanor and getting the ticket is the equivalent of being charged with that crime. You can take the steps we’ve outlined above to clear your record. We also want to note that repeat offenders are likely to experience serious consequences. The fine for reinstatement can be as high as $500 and you can lose your license for up to three years.

How Much PIP Insurance Do You Need?

The minimum PIP requirement in Florida is $10,000. The question you might be asking is, is that enough?

The short answer is no. You can certainly save some money by sticking to the minimum, but let’s review some information about car accidents and how much they cost to understand why you should pay for more than the minimum required by law.

Insurance adjusters use a multiplier to determine the general damages from an accident. In most cases, the multiplier is between one and five, with one being used for minor accidents and five for the most serious events. They may also add an amount for lost wages or pain and suffering.

Let’s say you were in a motor vehicle accident where you were not injured but the other driver was. If their medical bills totaled $5,000 – which is on the low end – you might be on the hook for far more than that amount.

  • $5,000 in medical costs
  • Multiplier of 2 = $10,000 in general damages
  • $3,000 of lost wages
  • Total liability: $18,000

You might not end up paying that much because it’s rare that an insurance adjuster would offer that amount up front. Instead, there would be some back-and-forth negotiating. But let’s say that the amount was $15,000. If you had only the minimum coverage required in Florida, you would need to pay $5,000 out of pocket.

Our experts agree that Florida drivers should buy the maximum amount of PIP they can afford. This rule applies to other types of coverage as well, including PDL, comprehensive car insurance and collision insurance.

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Tips to Save on PIP Insurance

Here are some quick pointers to help you save money on your PIP insurance:

  • Maintain a clean driving record. Most insurers will offer a discount for safe driving and the savings can be significant for those who haven’t been in an accident or received a moving violation.
  • Minimize your driving. This isn’t an option for everybody, but if you work from home, then you may not drive much and can qualify for a low mileage discount.
  • Bundle your policies. Most of us shop for insurance on a case-by-case basis. That may mean that you have life insurance with one carrier, car insurance with another and homeowner’s insurance with a third. Insurance companies want your business and most will offer a discount if you agree to move your existing policies with other carriers to them.
  • Shop around. We recommend getting quotes for car insurance from multiple carriers at least once a year.

The takeaway here is that if you’re worried about the cost of PIP, you should talk to your insurance agent or carrier and see what they can do for you. Insurance carriers won’t proactively offer discounts, so you’ll need to ask about them.

PIP insurance is required in no-fault states like Florida to protect drivers and minimize lawsuits. While $10,000 of coverage is required, we agree with our experts: buy as much liability coverage as you can afford to protect yourself if you’re injured in an accident.

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