What is PIP Coverage in Minnesota and How Does it Work?

Let’s break down a commonly misunderstood portion of auto insurance: Personal Injury Protection (PIP). In the state of Minnesota, PIP car insurance is required for all drivers, but that doesn’t necessarily mean everyone understands the ins and outs of what it does and does not cover.

Let’s get into it!

What is PIP?

Basically, Personal Injury Protection makes sure that everyone in an accident is able to have their injury-related costs covered. Also known as “No-Fault” coverage, it covers the cost of injuries to all individuals involved in an accident, regardless of who is at fault. This means that you can file a PIP claim even if reaching settlement with the other drivers involved proves to be a challenge.

What does PIP coverage look like?

Personal Injury Protection covers all injury-related costs following an accident up to a certain amount. Like all insurance policies, the specific coverage details are dependent upon your personal plan, but we’ll go through the basics.

1. The minimum required PIP insurance includes $40,000 of expenses per person per accident. In the event of death, PIP insurance covers up to $2,000 of funeral costs. 
2. All PIP claims are required to be filed within six months of an accident, and you may file PIP claims for yourself, those on your policy, and any passengers during the accident that do not have their own PIP insurance.
3. In the division of benefits, $20,000 covers medical costs and the other $20,000 covers nonmedical costs. While you may think that all injury-related costs are medical by nature, nonmedical expenses can include things like lost income and certain household services. 
4. PIP coverage pays a maximum of 85% of wages up to $500 per week and household services like groceries, housekeeping, and other forms of property maintenance up to $200 per week.

To see PIP benefits at work, let’s use an example. 

Imagine a couple, let’s name them Jim and Nancy, get rear-ended and the other driver flees the scene. Nancy acquires $12,000 in medical bills and is unable to work for 3 weeks. Jim acquires $15,000 in medical bills and is out of work for 7 weeks. With their injuries, neither is able to keep up with their regular household needs, so they hire a housekeeper and a delivery service to bring groceries. 

PIP coverage would include all $27,000 of their medical bills, along with up to $1,000 in weekly wage compensation and $400 in household services for the couple.

What else should I know about PIP insurance?

While PIP insurance covers most injury-related costs, it does not include compensation for pain and suffering or damage to the vehicle or other property. This form of coverage is meant to protect the individuals involved in the crash and ensure that all Minnesotans are able to receive medical care following an accident, without worrying about the cost.

If you own more than one vehicle, you can also stack your PIP insurance. Stacking your policies slightly increases your monthly premium, but also allows you to use the sum of your PIP benefits while driving any of the vehicles included. So, if you stacked the minimum coverage for two vehicles on the same policy, you’d be entitled to a total of $80,000 ($40,000 for medical, $40,000 for nonmedical) per person per accident. 

Knowing what level of compensation your PIP insurance entitles you to can help ease some of the stress already involved in an unexpected event. While we only covered the basics of PIP coverage in this article, there is almost always more to learn in a one-on-one conversation with an insurance agent. 

Book an appointment with one of our reliable and capable team members to learn more about PIP coverage and any other insurance needs you may have!