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Personal Injury Protection

The Real Reason Car Accidents Are So Expensive

Car accidents happen—a lot. According to the Property Casualty Insurers Association of America, the average driver files an accident claim about once every 18 years. At that rate, you could have three or four accidents in your lifetime, and chances are you or your passengers will be injured.

More than 2 million people are injured in car crashes each year. Injury accidents are extremely costly; even minor injuries can lead to hidden costs and serious financial problems. What if you can’t return to work for a while? Who will care for your children if your injury makes childcare difficult? Will you be able to clean your house, or take care of your yard?  

According to the National Highway Traffic Safety Administration, car accidents cost Americans $871 billion every year. If a driver or passenger sustains even a minor injury, costs can quickly skyrocket. You could be faced with:

  • Medical bills
  • Hospital expenses
  • Lost income
  • Needs for childcare or household help during recovery
If you don’t plan ahead, you might not have sufficient insurance if you or your passengers are injured in an accident. Personal injury protection (PIP) insurance might be what you need to help ease the financial burden of a car accident.

Minor Car Accidents May Cost More Than You Think

Serious car crashes are devastating for everyone involved. But have you ever stopped to think about the hidden costs of even minor accidents? Aside from direct medical expenses, injuries can lead to lost productivity and may cause financial hardships in ways people never expected.

  • In 2010, the average claim for injuries to cover both the insured driver and others involved in a crash had risen to $23,450, largely due to rising medical costs. (Insurance Research Council)
  • Medical expenses for auto injury claims are increasing faster than the rate of inflation. (Insurance Research Council)
  • From 2007 to 2012, average claims for medical expenses, lost wages, and other out-of-pocket expenses related to auto accidents grew 8% per year. (Insurance Research Council)
  • In 2010, car crash injuries resulted in over $99 billion in related medical costs and productivity losses. (Centers for Disease Control and Prevention)

Let’s say you sustain a back injury in a fender bender. Initially, you will be grateful to walk away with minimal damage to your vehicle. When the injury becomes apparent, the bills can start piling up quickly. You could face expenses for doctor visits, physical therapy, medications, X-rays, and MRIs. And what if you can’t return to work for a while? Who will care for your children if your injury makes childcare difficult? Will you be able to clean your house, or take care of your yard?

Personal injury protection insurance may be able to help you pay for some of these hidden—and potentially overwhelming—costs.


What is Personal Injury Protection Insurance?

Personal injury protection, or no-fault insurance, covers injuries and other costs for you, your passengers, and even pedestrians who are injured in a car accident. PIP auto insurance is mandatory in some states with no-fault insurance laws. In these states, an insurance company will pay for its own insured driver’s injuries (and passengers’ injuries), regardless of who is at fault for an accident.

  • PIP insurance is required in 12 states, while it is optional in 8 states. In other states, PIP insurance is not sold at all.
  • Personal injury protection covers crash-related medical costs and other expenses up to a certain limit. In no-fault states, a minimum amount of PIP coverage is required, and drivers can purchase additional coverage according to their needs.

What Does Personal Injury Protection Insurance Cover?

Coverage requirements and availability vary by state, but in general, PIP car insurance pays for expenses related to injuries sustained in an automobile accident (up to the dollar limit you have selected). Covered expenses may include:

  • Medical expenses: Ambulance services, X-rays, hospital bills, medications, medical supplies such as crutches and slings, rehabilitation, and any other medical expenses related to an accident may be covered.
  • Funeral expenses and death benefits: If an accident results in a fatality for you or a passenger, PIP may pay for certain funeral expenses as well as income replacement or death benefits to surviving family members (up to an amount specified in the policy).
  • Lost wages: PIP can provide income continuation for a specified length of time for an injured person who cannot work due to injuries sustained in a car accident.
  • Household and other collateral costs: If you cannot do yard work or housework on your own due to your injuries, PIP may cover the costs associated with hiring others to do it.
  • Childcare costs: PIP may pay for childcare if you need help caring for your children due to your injuries.

Contact your independent Trusted Choice® insurance agent to find out what personal injury protection insurance covers in your state.


How Do I Know If I Need PIP Insurance Coverage?

If PIP is required in your state, it is included in your auto insurance quote. If you think you have sufficient coverage under your health insurance plan, consider purchasing only the minimum PIP coverage required by your state. If you don’t have health insurance or have a plan with a high deductible, you might want to consider maxing out your PIP coverage to protect yourself if you are in a serious car accident.

You can work with your insurance agent to adjust your coverage limit and add or delete optional coverage as needed.


Should I Purchase PIP Insurance If It Is Optional in
My State?

In states where PIP is optional, there is likely to be coverage for medical expenses through health insurance policies. However, PIP offers valuable supplemental coverage. With the help of a Trusted Choice independent insurance agent, you can carefully evaluate your health insurance and other types of insurance coverage you might have to determine if PIP is right for you.

Here are some factors to consider:

  • PIP is relatively low-cost coverage, perhaps only $50 - $150 per year.
  • If you have a high-deductible health plan, PIP insurance can help you pay for prohibitive out-of-pocket expenses, and maybe even all of the medical expenses related to an accident.
  • No-fault coverage means bills get paid quickly. Rather than spending weeks or even months waiting for a determination of who is at fault (and whose insurance company will pay), PIP coverage allows injured parties to receive prompt payment for their expenses.
  • Coverage for hidden expenses can protect you from financial devastation.If you or your passengers need help with childcare, lost wages, and household expenses, your PIP coverage can help.

If you are in any way concerned about your ability to pay for accident-related injuries (or want to ensure that your passengers can pay for theirs), PIP might provide the peace of mind that you need.

If you have good medical coverage, as well as life and disability insurance to help with other expenses, you might be able to forgo PIP coverage and save money on your car insurance. In states where personal injury protection is not available, you may want to purchase medical payments coverage, which offers similar protection for injured drivers or passengers.


Compare Quotes for PIP Insurance

If you live in a state with mandatory personal injury protection coverage, it is already included in your auto insurance policy. In states where PIP is optional, rates vary based on a variety of factors.

A Trusted Choice independent agent can tell you if PIP is optional in your state, and can help you compare quotes from several companies so you can determine which one offers the best combination of coverage and price for your budget. In many cases, PIP coverage can be quite affordable, and it can protect you from serious financial consequences if you are in a car accident.

Contact a local Trusted Choice agent today to learn more and obtain competitive quotes.

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