PIP and the Texas Auto Insurance Policy

Purchasing car insurance for a new teenage driver is a scary and costly expense for parents. With statistics revealing most teenage drivers will sustain their first car accident within 12 months of acquiring a driver's license, car insurance companies are not apprehensive about dipping in our wallets for big bucks in premiums. For teenage driver's in Texas, the cost for full coverage insurance can, literally, be twice as much as that of the parents. Understanding one dynamic of the auto insurance policy, Personal Injury Protection (PIP), will offer additional education, to parents, in the scope of coverages and the basis for premium calculations.

Personal Injury Protection (PIP), is an optional automobile insurance coverage in Texas. Under state guidelines, PIP coverage is automatically added to a teenage driver's insurance policy unless the policy holder specfically opts out of the coverage. To do so, a form acknowledging the opt out provision is signed thereby eliminating the additional premium needed to supplement the policy with PIP coverage. Without signing this "opt out" form, PIP coverage will automatically appear on the teenage driver's policy, generally at a basic $2,500.00 limit. So, what is PIP coverage?

PIP coverage, in Texas, provides for coverage of the teenage driver's medical expenses and lost earnings when such loss is attributed to a motor vehicle accident, regardless of driver fault. Personal Injury Protection is afforded to not only the teenage driver, but also anyone riding as a passenger in the vehicle at the time of the accident. Personal Injury Protection (PIP), however, does not afford such coverage to individuals in other vehicles who may have been involved in the same accident. In addition, PIP coverage, on a teenage driver's automobile insurance policy, is considered unique and separate to uninsured motorist coverage. As a result, the insurance company, when a claim is filed, is not permitted to offset any uninsured motorist payment, also known as UIM, with the amount paid under PIP. Thus, another advantage, to the teenage driver, and a further incentive to not opt out of PIP coverage on the teenage driver's policy.

Purchasing PIP coverage, in Texas, is done automatically through the insurance agent. If the insured teenage driver does not opt out of coverage, the Personal Injury Protection coverage is automatically added and is provided in increments of $2,500.00, $5,000.00 or $10,000.00, depending on the premium paid. As a general rule, the premium difference, between a $2500.00 and $5000.00 policy limit, is rather negligible so it is most often recommended that Texas teenage drivers ensure the insurance agent has secured the $5,000.00 limit.

When filing a claim for damages under Personal Injury Protection, it is important to remember that benefits under this provision can be paid before damages under any other policy coverage are paid. For this reason, the teenage driver should inquire of the insurance adjuster as to the appropriate method for filing a loss under PIP, as soon as the accident has taken place. This will ensure monies are paid promptly allowing for an additional benefit in negating loss of wages or immediate medical expenses. Oftentimes, the PIP payments are processed within a few days of the claim submission and can be paid at policy limits even in cases where proof of loss, at the policy limit, has not been submitted.

For parents of a teenage driver, securing the proper automobile insurance coverage is costly. Understanding the scope and level of damages provided, the options for decreasing or eliminating optional coverages, will provide parents a more comprehensive view into what benefits are available and the basis for significantly high premium payments. For more information regarding Texas Automobile Insurance provisions, visit www.tdi.state.tx.us.