The Importance of Personal Injury Protection Benefits
Personal Injury Protection insurance (PIP), also known as "No Fault Insurance," is imparative to have, but many people choose to waive PIP to save a few dollars a year on their auto insurance premiums. Although Maryland doesn't require its drivers to maintain PIP insurance it is a worthwhile investment, especially if you are ever involved in an auto accident.
PIP insurance pays for your injuries without regard to fault. So, unlike liability coverage, which will only pay out damages to the other driver when you’re at fault, PIP will cover you even if you caused the accident.
Many people take the position that they don't need PIP to help cover medical bills when they are in an accident because they have health insurance. The problem with using your health insurance to cover bills in a personal injury auto accident is that your health insurance carrier may look to you to repay them should you recover money from the person who caused the accident. This is your health insurance carrier's right of subrogation. The beauty of PIP insurance is that they are not allowed to subrogate against you when you recover money in an auto accident case.
In addition to payment of medical bills, PIP may also be used to compensate you for lost wages caused by injuries sustained in an auto accident. Typically PIP pays lost wage benefits at 85 percent, that is to say that if you have lost wages of 100 dollars, PIP insurance would pay you 85 dollars.
Don't be fooled by insurance companies that tell you they can save you money on your premiums if you are willing to waive PIP insurance. The reality is that you may save a little money now but it will likely cost you in the long run.