What does PIP coverage under personal auto liability cover?

PIP coverage, or Personal Injury Protection, is an important component of auto insurance that extends beyond just medical costs. It provides coverage for medical payments, which include hospital and medical expenses incurred due to an auto accident, as well as compensation for lost income. The inclusion of 80% of lost income means that if the insured is unable to work due to injuries sustained in an accident, PIP coverage helps to replace a portion of those lost wages. This is particularly beneficial as it can ease financial burdens while the insured recovers.

In contrast, PIP does not cover property damage, which is addressed through separate coverage options like collision or comprehensive insurance, nor is it limited solely to medical payments or loss of income on its own. Therefore, the correct understanding of PIP is that it effectively combines both medical payments and a percentage of lost wages, providing a comprehensive safety net for individuals involved in auto accidents.