Today, we’re going to walk you through one important term you really ought to understand: Personal Injury Protection insurance, or PIP.
It’s a big subject because PIP works a little differently depending on the state you live in. First, we’ll explain how PIP works in states that require it. Then we’ll explain how PIP works in states like Nebraska and Iowa, where it isn’t mandatory.
Were you injured in a car accident and have questions about your insurance coverage? At Hauptman, O’Brien, Wolf & Lathrop, LLC, our attorneys can help you understand your policy, evaluate your options, and pursue the compensation you deserve. Contact us online or call (402) 241-5020 to schedule a free consultation.
What Is Personal Injury Protection (PIP) Insurance in a No-Fault Insurance State?
A handful of states follow a system called no-fault car insurance. After a car crash in one of those states, each injured party generally must turn to his or her own auto insurance provider to claim compensation for covered personal injury damages, such as medical bills and lost wages.
In other words, in a no-fault car insurance state, your own car insurance carrier is generally responsible for paying covered benefits, regardless of who caused the crash.
These states typically require every driver to carry a special kind of insurance called Personal Injury Protection (PIP), which pays for each policyholder’s respective covered injury-related expenses. Depending on the state, PIP may cover medical bills, lost income, and certain other expenses, up to the limits established by law or the insurance policy.
There are advantages and disadvantages associated with no-fault car insurance systems. Sadly, if you’re an auto accident victim who didn’t cause the crash, you might have a harder time getting the comprehensive justice you deserve in these states. That’s because, in many cases, your recovery may initially be limited to your own PIP coverage. (Rules vary from state to state, but generally speaking, filing a lawsuit directly against the at-fault party may be restricted unless certain injury or monetary thresholds are met.)
What Is Personal Injury Protection (PIP) Insurance in Nebraska and Iowa? How Is It Different from MedPay?
Nebraska and Iowa are not no-fault car insurance states. Rather, both follow fault-based insurance systems, meaning the party who causes the crash may be held financially responsible for the resulting damages. If you’re the injured party, you can pursue a claim directly against the at-fault driver and their insurance policy.
You might wonder, then, how Personal Injury Protection (PIP) insurance works in states like Nebraska and Iowa, where PIP isn’t required.
In Nebraska and Iowa, PIP is not mandatory, and its availability depends on the insurance provider and policy. Some insurers may offer optional PIP or similar expanded first-party injury benefits, while others primarily offer Medical Payments Coverage, commonly called “MedPay.”
Like MedPay, a PIP policy, when available, can help pay your medical bills while you wait for your claim against the at-fault driver to resolve. This is important because car insurance claims sometimes take many months or years to resolve, but your medical care providers will expect you to pay them in the meantime. A MedPay or PIP policy can cover eligible bills in the interim. (Or, if you’re turning those bills in to your health insurance, your MedPay or PIP policy may reimburse you for covered copays and/or deductibles.)
Unlike MedPay, PIP may also cover some other non-medical damages, such as lost wages, certain home care expenses, and so on. (Be sure to check your particular PIP policy to understand exactly what is and isn’t covered.)
Personal Injury Protection may also provide benefits for injuries to passengers and pedestrians, depending on the policy. This is important because these parties may have extremely costly damages, even in a relatively moderate accident. PIP can cover reasonable and necessary medical expenses in those cases, subject to policy limits and eligibility requirements.
The Nebraska Department of Insurance’s Auto Insurance Shopping Guide explains the differences between MedPay and PIP, including the additional expenses that PIP may cover when available.
What Are the Main Differences Between PIP and MedPay?
Although both types of coverage can help pay accident-related expenses regardless of who caused the crash, there are several important differences:
- Medical expenses: Both PIP and MedPay generally cover eligible accident-related medical bills.
- Lost wages: PIP may replace a portion of lost income, while standard MedPay typically does not.
- Other expenses: PIP may cover certain household services, caregiving costs, or funeral expenses, depending on the policy.
- Passenger coverage: Both may provide benefits to injured passengers, subject to policy terms and exclusions.
- Availability: MedPay is commonly offered as optional coverage in Nebraska and Iowa, while PIP availability varies by insurer.
Neither coverage automatically replaces your right to pursue compensation from the negligent driver under Nebraska or Iowa personal injury law.
Should You Buy Personal Injury Protection (PIP) Insurance in Nebraska or Iowa?
At a very minimum, we encourage all drivers in Nebraska and Iowa to consider adding MedPay coverage to their existing car insurance policy. For even greater protection, consider adding PIP or similar expanded injury coverage if your insurer offers it.
Even if you have health insurance, these optional coverages can be extremely beneficial in helping you cover your out-of-pocket medical costs while waiting for your car accident claim to resolve. They can also help your passengers cover the critical medical care they need. However, MedPay and PIP are first-party injury coverages and do not replace the liability insurance needed to protect you against claims from passengers or pedestrians if you cause an accident.
MedPay coverage is often available for a relatively modest additional premium. PIP coverage, where offered, may cost more depending on the benefits and limits selected.
Remember: Nebraska and Iowa have different minimum automobile liability insurance requirements, but neither state requires drivers to purchase PIP. Before selecting optional coverage, compare the available benefits, exclusions, and premiums with your insurer.
Be Sure You Understand What Personal Injury Protection (PIP) Insurance Means Under Your Policy
Just as the rules for Personal Injury Protection vary from state to state, the specifics of coverage may also vary from one insurance provider or policy to the next. PIP policies are frequently subject to numerous limitations. It’s important that you understand those limitations, as well as the precise differences between MedPay and PIP as defined by your carrier (in the event both those coverages are available as options).
You should also review whether your policy includes reimbursement or subrogation provisions that could affect how much compensation you ultimately retain after settling a personal injury claim. In Nebraska, Nebraska Revised Statute § 44-3,128.01 addresses certain insurer reimbursement rights involving MedPay benefits. In Iowa, Iowa Code § 668.5 establishes limitations on certain subrogation claims, including rules concerning recoverable amounts and legal expenses. The specific reimbursement rights depend on the applicable state law, insurance policy, and circumstances of the claim.
Car insurance coverages are complex. Be sure to review your options thoroughly with your provider. When in doubt, talk to a lawyer in your jurisdiction.
Schedule a Free Case Review with Our Nebraska and Iowa Car Accident Attorneys
Have you been injured in an auto accident in Nebraska or Iowa? Let us help you understand your rights and options under both your insurance policy and state personal injury law.
At Hauptman, O’Brien, Wolf & Lathrop, LLC, we offer confidential, cost-free, no-obligation case reviews for people who have suffered an auto accident injury throughout Nebraska and Iowa. Our six office locations in Omaha, South Omaha, Bellevue, Lincoln, Council Bluffs, and Sioux City allow us to serve injured clients across both states.
If you hire us, we will not charge a fee unless we are able to recover compensation for you.
Consultations are available in person or over the phone. To talk with one of our Nebraska or Iowa car accident attorneys about your legal options, contact Hauptman, O’Brien, Wolf & Lathrop, LLC online or call our Omaha office at (402) 241-5020, or our Council Bluffs office at (712) 201-8131 today.
