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Understanding Your Car Insurance - Personal Injury Protection

Posted by attorney James Terry

After years of handling personal injury cases and car wreck cases in particular, I have found that very few people actually understand what their car insurance covers and what choices they have when purchasing coverage. My comments are limited to Texas insurance since that's what I know and deal with most often.

Ever heard someone talk about PIP? Do you know what it is or what it means? Don't be embarrassed, most people don't. PIP stands for Personal Injury Protection, and it is one of the least expensive but most valuable coverages you can purchase. PIP can usually be purchased in increments of $2,500, $5,000, or $10,000. The more you can afford the better, but even the minimum ($2,500) is far better than nothing. So how cheap is cheap? Well, I have $10,000 in PIP coverage for three vehicles and the total cost is right at $13.00 per month.

I know what you're thinking - Ok, so it's not expensive but why do I need it? Why is it so valuable? PIP is so valuable because of what it covers. Simply put, it is no-fault coverage for medical bills and lost wages. Let's take an example. You get into a wreck and it's your fault! As a result of the wreck, you are injured and miss several days of work. If you were smart enough to buy PIP coverage (and now you are since you have read this), you would have coverage under your auto policy.

What? Yes, it's true. Even though the wreck was your fault, you can still make a claim on your policy for PIP benefits. Those benefits can help you pay medical bills and would even pay you up to 80% of your lost wages. But wait, there's more. PIP covers passengers in your vehicle as well and would even cover you if you were injured as a pedestrian. Pretty amazing, huh? With estimations of anywhere between 20% to 25% of Texas drivers being uninsured, PIP is an inexpensive way to provide you and your passengers with some benefits should you be unfortunate enough to be involved in an automobile collision - regardless of fault!

Oh, one more thing - don't let your insurance company sell you the not as valuable alternative called "med pay." Med pay is still better than nothing but is more limited than PIP in that med pay does not assist with lost wages. Additionally, med pay is subject to subrogation (a complicated issue beyond the scope of this entry but just know it's a bad thing for you!). Why limit your benefits? Just insist on PIP coverage - the "cheapest, most valuable coverage in Texas."

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