Many of us buy automobile liability because we have to — state law requires that we carry minimum coverage of $20,000.00 to pay for any damage that we might cause others. But what about our own losses? Will that other driver’s $20,000.00 minimum policy be enough to protect us? Probably not. Because of this, we urge our clients to purchase uninsured/underinsured coverage to protect them.

Uninsured/underinsured coverage allows you to file a claim for your injuries if you’re in a wreck where the other driver doesn’t have any insurance or doesn’t have enough insurance to compensate you for your injuries. Today, an estimated 20% of Texas drivers don’t carry liability insurance at all. Those who do carry it often have only the minimum policy limits of $20,000.00. Unfortunately, with the high cost of health care, just one surgery could cost you in excess of that minimum $20,000.00 coverage policy. In such a situation, if you haven’t purchased an Uninsured Motorist/Underinsured Motorist Coverage (UM/UIM) policy, you’ll be seriously out of luck.

We also recommend the purchase of Personal Injury Protection coverage ("PIP"), an inexpensive policy that pays for the medical expenses and lost wages that you incur as a result of an auto accident. One important feature of PIP is that there is no subrogation. Most insurance policies, including most health insurance policies, have a subrogation clause that requires you to reimburse the insurance company for any benefits they have paid on your behalf if you recover compensation for those injuries from a third party (for example, settling your car wreck claim with the other driver involved). However, because PIP does not have a subrogation clause, you can submit the same medical charges to both a defendant driver and to your PIP carrier. The PIP carrier will not ask for reimbursement from any recovery you make in settling or winning a lawsuit. (Your automobile policy also offers MedPay as an option to PIP. MedPay is similar to PIP, but it does have subrogation provisions that will require you to pay the carrier back with any third party compensation you might receive).

The second PIP feature is that it allows stacked coverage. This means that in most cases you can submit medical bills to your PIP carrier even if they have already been paid for by your health insurance policy.

You may wonder then why you need PIP if you have health insurance or why you would need PIP if you plan to recover from the other driver involved in any accident. Unfortunately, health insurance — even good health insurance — doesn’t pay 100% of your bills. PIP helps bridge that gap. PIP also covers any lost wages you suffer by reimbursing you for those. Lastly, anyone who has ever been a party to a personal injury lawsuit will tell you that many expenses, such as attorneys’ fees, are not reimbursed. PIP can be an effective way to help offset these expenses.

In short, PIP is a smart bet and insurance money well spent.