State insurance laws can vary but generally the order of recovery for loss (if coverage is applicable and/or available) is:
- Workers Compensation
- Personal Injury Protection (PIP)
- Medical Payment Coverage (MEDPAY - MP)
- Liability Coverage (other party's Bodily Injury Liability)
- Uninsured Motorist (UM) or Underinsured Motorist (UNDUM)
- Health Insurance or other applicable coverage
If your state and insurance company follows this listed order above then your PIP would pay out first to its limits and then your Uninsured Motorist coverage would be gone to next. The minimum limits for Personal Injury Protection (PIP) coverage differ but in general it leaves gaps in your coverage which Uninsured Motorist (UM) coverage will help fill in.
For example in Florida, which is a no-fault state, the minimum PIP coverage required by the state pays 80 percent of medically necessary expenses, 60 percent of lost wages, 100 percent of replacement services such as child care, housekeeping or yard work and up to $5,000 for death benefits.
For a higher premium in FL you can amend your PIP to increase medical expenses to 100 percent and lost wages to 80 percent; or increase your minimum limits from $10,000 to $20,000, or more.
So in Florida, like many states with PIP the limits are very insignificant if you are severely hurt. Uninsured Motorist coverage covers bodily injuries to you and your passengers when the other person has no insurance or not enough insurance in an accident that is not your fault and can protect you better than a policy with just PIP coverage.
Given the large number of uninsured motorist, which has shown in studies to have increased in past years due to the economical down turn in the US, it is important to have coverages that will cover expense medical bills if you are severely injured in an automobile accident. If your PIP, or no-fault, benefits carry a $10,000 limit like in FL than unless you have increased your limits or have extra coverages like UM you may end up finding a way to pay large medical bills on your own.
If your PIP limits are exceeded but you have Uninsured/Underinsured coverage it will be gone to and either pay your all your medical expenses (depending upon the limits of your UM coverage) or at least ease your burden by paying some of the money to the doctors. So in instances where your PIP benefits will not cover all of your medical expenses and the other driver is uninsured than UM insurance really would help you and your family.
Uninsured/Underinsured Motorist Coverage (UM) protects you far beyond PIP. It will usually pay for 100% of medical bills, 100% of wage loss and for 100% of your pain and suffering up to whatever limits of coverage you place on your car insurance policy. What exactly UM will pay out depends upon state laws and the terms of your policy.
In most states how UM coverage works with PIP is that PIP would pay first and then your UM coverage would be gone to. UM coverages will give much better protection if you are injured by an uninsured motorist since they usually pay out more than PIP coverage.
UM pays for medical expenses and lost wages (after your PIP coverage is exhausted) that you and your passengers may incur. This coverage also includes payment for pain and suffering if you have a permanent injury or death which is something else PIP does not cover.
Given the unfortunate large number of uninsured motorists driving in each state, Uninsured Motorist can be important coverage to have, even in states with no-fault insurance where Personal Injury Protection is required and would be used first.
You can contact your state's insurance regulator to find out more about how PIP and UM coverages work together according to your state's specific insurance laws.
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