Updated July 2026
What Is Personal Injury Protection Insurance?
Personal Injury Protection pays medical expenses, lost income, and essential services costs for you and your passengers after an accident, without requiring a fault determination first. It functions as first-party coverage, meaning your own policy pays your bills even if you caused the crash. PIP typically covers hospital bills, rehabilitation, funeral expenses, and a percentage of lost wages up to your selected limit. Unlike liability coverage, which pays the other driver's expenses when you're at fault, PIP pays your expenses regardless of fault.
- You rear-end a stopped car at a red light and suffer a concussion and broken wrist. Your medical bills total $18,000 and you miss three weeks of work, losing $3,200 in wages. Your PIP policy with a $10,000 limit pays the first $10,000 of your medical bills immediately, without waiting for fault determination. Your health insurance covers the remaining $8,000 after deductibles, and PIP pays 80% of your lost wages ($2,560) up to the policy limit.
- Another driver runs a stop sign and hits your passenger side. Your passenger suffers a fractured collarbone with $12,000 in medical costs. Your PIP coverage pays your passenger's bills up to your policy limit immediately, while the at-fault driver's liability coverage is still being processed. This prevents your passenger from waiting weeks or months for the other driver's insurer to accept liability and issue payment.
- You swerve to avoid a deer and hit a tree. You're at fault for the crash, and your health insurance has a $5,000 deductible. Your PIP policy pays your emergency room visit, CT scan, and follow-up appointments immediately, covering the $5,000 your health plan won't pay. Without PIP, you'd pay that deductible out of pocket before health insurance begins coverage.
Who Needs Personal Injury Protection Insurance?
PIP makes sense for drivers with high-deductible health plans, self-employed individuals who can't afford to miss work without immediate wage replacement, and households with passengers who lack health insurance. It's particularly valuable if you frequently drive with family members or carpool passengers, since PIP covers all occupants in your vehicle regardless of their own insurance status.
Compare your health insurance deductible to the cost of adding PIP. If your health plan has a $3,000 deductible and PIP with a $5,000 limit costs $15 monthly, you're paying $180 annually to avoid a potential $3,000 out-of-pocket expense. If you have a $500 health deductible and employer-paid disability, the $180 annual PIP cost may not justify the limited additional protection.
How Much Does Personal Injury Protection Insurance Cost?
PIP typically adds $8 to $25 per month to an Indiana auto insurance premium, or approximately $96 to $300 annually, depending on coverage limits and deductible selections.
- Coverage limit selected — policies range from $2,500 to $50,000, with higher limits increasing premiums proportionally.
- Deductible amount — choosing a $500 or $1,000 deductible reduces monthly cost compared to zero-deductible PIP.
- Number of vehicles and drivers on the policy — PIP applies per person, so larger households pay more.
- Zip code medical cost index — areas with higher average hospital and specialist costs see higher PIP premiums.
- Claims history — prior PIP claims in the past three years increase renewal premiums by 15% to 40%.
- Coordination with health insurance — policies that require health insurance to pay first before PIP kicks in cost less than primary PIP coverage.