What is a personal injury protection deductible?
Your auto policy's personal injury protection deductible, also known as your PIP deductible, is the amount of money you pay out of pocket before your auto insurer can cover a PIP-related claim. Depending on your state, your PIP coverage may not include a deductible or may have different deductible options to choose from.
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How does a PIP deductible work?
If you suffer an injury in an auto accident, your personal injury protection coverage may pay for medical bills and other services, up to your auto insurance coverage limits and minus your deductible (if you have one). Your PIP deductible is the amount you must pay "out of pocket" for your claim, while your insurer covers the remaining expenses (usually medical bills) up to your policy's limit.
The amount of your deductible, and the ability to choose your deductible, varies by state. If you live in a state that requires or offers PIP coverage, check with your insurer to determine your deductible options. Some states that require or offer PIP coverage don't allow deductibles.
Example:You have suffered an injury in a car accident, and you are unable to work for two weeks. Your lost wages total $5,000. Because the personal injury protection deductible on your policy is $1,000, your insurer may pay you up to $4,000.
What to consider when choosing a PIP deductible
There isn't a right or wrong answer when selecting a car insurance deductible; it's a matter of preference. Choosing a lower deductible will cost more than a higher deductible, but if you have a PIP claim, you pay less out of pocket with a lower deductible. A higher deductible will lower your insurance rate, but you'll pay more out of pocket if you file a claim.
Learn more about figuring out how much PIP coverage you need, as well as how insurance deductibles work.
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