Personal injury protection coverage

Personal injury protection covers medical bills and indirect costs from car accidents.

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Your health insurance will cover most of your medical bills, but it may not cover the indirect expenses you may incur from an auto accident. Personal injury protection can fill in the gaps.

What is personal injury protection?

If you’re involved in a car accident, personal injury protection (PIP) pays for the medical services and some other nonproperty damages you or your passengers may need afterward. PIP applies regardless of who’s at fault in an accident.

What does personal injury protection cover?

PIP is designed to protect you against the cost of more than just medical services. Coverage may include:

  • Ambulance rides
  • Child care
  • Death benefits
  • Funeral services
  • Housekeeping
  • Lost income
  • Nursing care
  • Prosthetics

What doesn’t personal injury protection cover?

Any damage to personal property or injuries sustained by people in another vehicle aren’t protected under PIP. Comprehensive, collision and liability coverage are necessary to cover the cost of damages to your own property or another person’s property and medical expenses.

Guide to car insurance coverage

Who does personal injury protection cover?

Coverage varies depending on your insurance company, but typically includes:

  • You when you’re driving your car
  • Your passengers when you’re driving your car
  • Anyone driving your car with permission
  • You when you’re riding in another car
  • You while you’re out walking or cycling

How much does personal injury protection cost?

You may be able to purchase personal injury protection for around $10 – $15 per month. However, like any other car insurance coverage, the cost of PIP will depend on your personal driving history, where you live, the car you drive and even your credit score among other factors.

Why should I buy personal injury protection?

You might need to buy PIP if you live in Quebec or Manitoba. But it could still be a good idea even if it’s not required.

If you’re involved in a car accident, your health insurance will cover you for most of your primary medical needs. But you may not be covered for other expenses that stem indirectly from the accident.

For example, health insurance doesn’t usually reimburse you for lost wages, while PIP does. PIP may also help cover your health insurance deductible. You might want PIP coverage especially if you frequently drive with passengers who could hold you responsible in the case of an accident.

How much will PIP pay?

The amounts and policy limit your PIP insurance will pay depends on where you live. For example, in Quebec, a standard PIP policy will cover up to $50,000 in personal injury and property damage claims outside of Quebec. In terms of income replacement component of PIP, Manitobans will have up to 90% of any lost income covered, up to a maximum annual income of $98,500.

Personal injury protection in action

You’re involved in a side-impact car collision, and your arm is now broken. You’re anxious because you’re the only one in the family who drives your kids to school. Fortunately, PIP could pay for the cost of hiring a nanny, who transports your kids to school while your arm heals.

What are the provincial and territorial minimums?

Every province and territory has different minimum car insurance requirements. Between coverage limits and types of insurance, be aware of the minimum requirements where you live before getting on the road. There are two general approaches the government takes towards claims coverage: No-fault and at-fault. Personal injury protection is either mandatory or recommended in no-fault provinces.

No-fault coverage

All provinces in Canada enforce some form of no-fault car insurance. When you have no-fault coverage, each person in an accident is covered by their own insurance company, regardless of who caused it and the insurance company investigates and decides who caused the accident. Many of these types of policies require personal injury protection. For example, both Quebec and Manitoba require PIP in their basic policies. Ontario, on the other hand, only recommends that you add PIP for additional coverage.

How is no-fault coverage different in each province?

The difference between how each province handles no-fault coverage really comes down to whether or not you can take someone to court. For example, Quebec has comprehensively adopted no-fault coverage, which means insurance companies cover all payouts related to their client, and you can’t legally sue someone for damages beyond what the insurance company has covered. Conversely, Alberta accident victims will still be covered by their insurance company up to a specified amount, but still have the right to sue the other driver for further compensation due to financial losses, pain or suffering.

At-fault coverage

In an at-fault system, each insurance company pays for damages according to the degree of fault of each party. If you are found to be completely at fault, you may not receive any payout from your insurer. This type of coverage is optional in Saskatchewan.

How do I buy personal injury protection?

If you’re in a province or territory that requires or recommends PIP, your current insurer will offer it. Contact the company and ask for more details. If you have the option to buy insurance from a private company, don’t be afraid to shop around for the best price. Each company has different underwriting methods, so your quotes can vary significantly from company to company.

Does PIP come with a deductible?

PIP comes with deductibles. The deductible is what you’ll pay before your insurance company will pay a claim. You’ll choose how high you want it to be when you’re buying insurance. To decide, check what your health insurance covers and consider how much you’d want to pay out of your own pocket. The higher you set your deductible, the lower your insurance premiums will be.

Bottom line

Personal injury protection can cover you for costs that your health insurance doesn’t pay for. It’s also required in more states than medical payments coverage is. Compare car insurance policies with PIP to find the best deal for you.

Frequently asked questions about PIP

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