Health Insurance Is Not A Replacement for Personal Injury Protection

“We could lower your personal injury protection (PIP) and that would reduce your monthly payment by $11 and then you could use your PIP for co-pays and deductibles.”

This was nearly verbatim what my insurance agent told me recently when I was looking at options on how to reduce my monthly rate. I was shocked at not only the misguided advice, but frankly the flat out wrong (and potentially illegal) guidance. I’d be willing to bet that this was a regular selling point for this agent and his office. The insurance agents are likely told to use this as a selling point when a potential customer is out shopping for insurance rates. Their advice to “cancel personal injury protection” or “reduce personal injury protection” is flat out dangerous.

To understand how dangerous this can be, you must first understand the difference between personal injury protection and health insurance. Personal injury protection is a type of insurance coverage that you can purchase. It normally covers $10,000, $20,000 or $35,000 through your auto insurance company to pay for medical expenses, household services (cleaning, etc.) and lost wages (normally a maximum of $200/week). It is a no-fault coverage, which means it is paid even if you are at fault for the auto collision. Personal injury protection normally pays your medical expenses in full, whereas with health insurance there are deductibles, co-pays and co-insurance. It applies to all the occupants of your vehicle as well as pedestrians that are struck. However, PIP is always a primary insurance and you cannot simply pick and choose (as my agent said) how to use the coverage. You do not get a $10,000 check and then just apply it to co-pays, deductibles and co-insurance as you need it. You first must use up all your PIP and then move onto health insurance where you will incur the additional expenses.

As you can imagine, $10,000 can go very quickly in the case of a car accident. An ambulance ride, an emergency room visit and follow up care can easily cost more than the $10,000 that your PIP allows. If an individual does not have PIP, their health insurance would cover some of the care minus the deductibles, co-pays and co-insurance. Even with health insurance, a person could quickly be out of pocket thousands of dollars if they do not have PIP to assist them.

The lesson in this is that health insurance does not reduce the need for personal injury protection (PIP). In fact, we recommend everyone double check they have PIP coverage with their auto insurance policy. It can make the difference between being financially secure after an auto accident and or paying tens of thousands of dollars out of your own pocket.