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What is Personal Injury Protection (PIP) on the Florida Personal Auto Policy?


According to the Florida Office of Insurance Regulation (OIR), Florida is one of ten states that have Personal Injury Protection (PIP) auto insurance. Also called Florida No Fault Insurance, the intention of PIP coverage is to provide injured drivers in Florida up to $10,000 in immediate medical coverage in lieu of establishing fault through the tort remedy. The goal of PIP is to reduce the delay in receiving payment for injuries as well as to limit the utilization of the court system in Florida to determine fault in auto accidents.

In Florida, all owners of registered motor vehicles with four wheels are required to purchase PIP coverage. By purchasing PIP coverage, the individual goes to his own automobile insurance policy to collect for his injuries in an accident regardless whether he caused the accident.

This is what is meant by Florida being a “No-Fault” insurance state.

PIP covers a child, members of your household, and certain passengers who lack PIP insurance as long as they do not own a motor vehicle. Passengers in your car who carry PIP coverage will go to their own auto policies for their injuries. PIP also covers your child if he or she suffers an injury while riding in a school bus. Florida PIP coverage protects you while you are riding in someone else’s vehicle, as a pedestrian, or as a bicyclist if you suffer an injury involving a motor vehicle.

PIP coverage also provides coverage for acts of violence against you while driving, including injuries sustained as a result of road rage or a carjacking.

If an automobile accident happens outside Florida but inside the U.S. or Canada, PIP covers you and relatives who live in your home. In this case, you must be driving your own vehicle. People other than you or your relatives are not covered.

What does PIP insurance pay?

PIP insurance pays for 80% of your reasonable medical bills, including medical, surgical, dental, ambulance, rehabilitative, eye glasses, hearing aids and prosthetic devices. It covers 60% of your lost income and/or earning capacity as a result of an accident. This means that you have to recover the remainder of your expenses from the driver who is at fault in the accident. PIP also pays for replacement services incurred as the result of an automobile accident, such as maid service, lawn care, etc. as well as a death benefit up to $5,000. The maximum payable under PIP coverage is $10,000, unless the policy affords a higher amount.

PIP options to reduce your premium

  • Deductible – You may reduce your PIP premium if you choose a deductible option, meaning that you are responsible for paying the deductible out of pocket before you go to your auto policy. Deductible options range from $250 to $2,000. The higher the deductible, the greater the premium savings on your PIP coverage. (Gracey-Backer, Inc. does not recommend a deductible option.)

If you do not choose a deductible for your PIP coverage, then you may choose any of the other following options to reduce your PIP premium:

  • Rejection of Work Loss Coverage – If you are retired or unemployed, you may eliminate the work loss coverage, which normally pays 60% of lost wages, subject to the $10,000 maximum, as the result of an automobile accident.
  • Coordination with Military Benefits – If you receive medical benefits from the military, you may reduce your medical benefits payable by PIP by the amount you receive from the military.

PIP options which increase your premium

  • Extended PIP – Extends your medical benefits for you and your family members, still subject to the $10,000 maximum, to cover 100% of your medical bills and 80% of work loss as the result of an auto accident.
  • Additional PIP Coverage – If you choose to purchase Extended PIP coverage, you may also increase the $10,000 maximum benefit to $25,000, $40,000 or $90,000. Under this option, you may also exclude Work Loss coverage for you, your spouse and family members. You may not choose Coordination with Military Benefits under this option.
  • Broadened PIP – If someone else who is not a family member regularly operates you car, you may add that person as an additional insured to receive the same PIP benefits as if he were a family member. That person may also purchase Additional PIP Coverage.

John Gracey Backer, CPA


John Gracey Backer, CPA, is the Treasurer of Gracey-Backer, Inc., an Insurance Agency in Delray Beach, Florida specializing in All Lines of Malpractice, Professional and Personal Insurance for the Healthcare Provider. He can be contacted at 800-272-6055 ext 128, or at john@gbifl.com.

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