Make the Most of Your Auto Insurance Coverage with Higher Levels of PIP

State laws require drivers to carry a certain amount of liability insurance coverage to pay for the accidents they cause. Maryland law requires that all motor vehicles registered in Maryland be insured by a company licensed in the state and carry coverage of $30,000 for bodily injury per person, $60,000 for bodily injury for two or more people, and $15,000 for property damage.

Liability coverage commonly pays for:

• Expenses to repair or replace the other driver’s car
• Other people’s medical expenses when you are at fault for the accident

But liability coverage doesn’t pay to repair or replace your own car or treat your injuries. That is why many people purchase higher than required levels of other types of coverage, such as Personal Injury Protection (PIP).

Personal Injury Protection

Personal Injury Protection, or PIP, will reimburse you and others named on your policy for reasonable and necessary medical expenses and 85 percent of lost wages up to the policy limits, no matter who caused the accident. Maryland law requires consumers to purchase at least $2,500 in PIP coverage, but they have the option to buy more, potentially as much as $10,000.

Some people sign a waiver to decline PIP altogether or purchase only a limited amount to reduce their insurance premium, but waiving PIP is not usually recommended. PIP is usually a valuable coverage to have, especially for those who don’t have primary health insurance or cannot work due to their accident-related injuries.

PIP is a safety net for loss of “income,” which is defined to mean wages, salaries, tips, commissions, professional fees, and other earnings from work or employment; earnings from a business or farm owned individually, jointly, or in partnership; and to the extent earnings are paid or payable in property or services instead of in cash, the reasonable value of the property or services.

Contrary to popular belief, filing a PIP claim will not cause your insurance rates to increase, and purchasing full PIP typically adds a nominal fee to your total insurance bill, making buying it a wise financial decision.