What PIP pays, using one state's statute as the illustration. Coverage is defined state by state, so a national description would be false in detail everywhere. Florida's statute is a clean example because it is written out in full. Section 627.736(1) of the Florida Statutes requires a complying policy to provide personal injury protection up to a limit of $10,000 in combined medical and disability benefits plus $5,000 in death benefits, and it names who is covered: the named insured, relatives residing in the same household, persons operating the insured motor vehicle, passengers in it, and other people struck by the vehicle while not occupying a self-propelled vehicle. That last category is worth noticing. A pedestrian or a cyclist hit by the car is covered by its PIP.
The three benefit types under that statute each have their own rule. Medical benefits are 80% of all reasonable expenses for medically necessary medical, surgical, X-ray, dental and rehabilitative services, including ambulance, hospital and nursing services, and they are payable only if the injured person receives initial services and care within fourteen days of the accident. Reimbursement for that care is limited to $2,500 unless a qualifying provider determines the person had an emergency medical condition, in which case reimbursement runs up to $10,000. Note what that ceiling does and does not reach: it is written against the medical services, so the disability and death benefits below are governed by their own paragraphs rather than by the $2,500. Disability benefits are 60% of any loss of gross income and loss of earning capacity, payable at least every two weeks, plus all expenses reasonably incurred in obtaining from others ordinary and necessary services in lieu of those the injured person would otherwise have performed for the household without income. That last clause is the replacement-services benefit, and it is the part almost nobody knows they have: the cost of paying someone to do the childcare, cleaning or yard work the injured person can no longer do. Death benefits are $5,000 per individual and are in addition to the medical and disability benefits.
The trade for that coverage is a limit on suing. In a no-fault state PIP comes paired with a tort threshold. Florida's, at section 627.737, exempts an owner or operator from tort liability for bodily injury to the extent PIP benefits are payable, and then permits a plaintiff to recover damages for pain, suffering, mental anguish and inconvenience only where the injury consists in whole or in part of a significant and permanent loss of an important bodily function; a permanent injury within a reasonable degree of medical probability, other than scarring or disfigurement; significant and permanent scarring or disfigurement; or death. Below that line, the injured person's recovery for non-economic damage is the PIP benefit and nothing else. That is the bargain a no-fault system makes: faster payment without proving fault, in exchange for a narrower right to sue.
How you decline it, and how you shrink it. Where PIP is included by default rather than mandated outright, the refusal is a formal act. Texas's regulator states the rule plainly: all auto policies in Texas include PIP coverage, and a policyholder who does not want it must tell the company in writing. Florida takes a different route and lets the coverage be trimmed rather than dropped. Section 627.739 requires insurers to offer deductibles of $250, $500 and $1,000, applied against 100% of the expenses and losses, and to offer a version of the coverage in which the loss-of-income benefit is excluded. Each election reduces the premium, and each applies only to the named insured or to the named insured plus dependent resident relatives, never to other people covered under the policy. The statute also prescribes the exact warning the insurer must print, in ten-point type: the named insured "is hereby advised not to elect the lost wage exclusion if the named insured or dependent resident relatives are employed, since lost wages will not be payable in the event of an accident." It is unusual for a legislature to write consumer advice into a rating statute, and it is a fair signal of how often the election was being made by people who should not have made it.
Where PIP fits against everything else in the policy. It pays your side of the crash, quickly, before fault is resolved. Liability coverage pays the other side. Uninsured and underinsured motorist coverage pays your side when the other driver cannot. Health insurance may cover the same medical bills, and which pays first is a coordination question set by state law and by the policies involved, so it is worth asking the insurer rather than assuming.
