Should I carry a PIP Deductible on my Auto Insurance policy?
The short answer: no. Here’s why.
What is PIP?
PIP stands for “Personal Injury Protection”. It’s meant to provide coverage for YOU (the insured) and your “resident relatives” for YOUR injuries sustained in an automobile accident. The Standard PIP limit is $10,000 per person, per accident. PIP provides for 80% of your medical expenses (up to $10,000) or 60% of your lost wages (up to $10,000). PIP is required by Florida law (along with Property Damage liability) when you purchase an Auto Insurance policy.
How does the PIP Deductible work?
Let’s say you have a $1000 PIP Deductible, and you’ve been injured in an accident. You have $7000 in medical expenses. The $1000 gets deducted from the $7000 medical expense bill, and then you get 80% of that.
($7000-$1000) x 80% = Settlement.
In this scenario, the settlement would be $4800.
What’s it mean to you?
Oftentimes people are convinced that carrying a PIP Deductible on their policy is worth it, however In reality having a PIP Deductible isn’t worth the money you save. It takes away typically $500-$1000 worth of coverage just to save $5 to $10 every 6 months.