For example, say you live in Florida, where you are required to have a minimum personal injury protection policy of $10,000. If you caused an accident that resulted in injuries to you that required medical treatment costing $15,000, your PIP would cover $10,000. If you purchased a plan with more coverage, your insurance would pay for expenses up to that limit.4
In contrast, liability insurance does not cover the cost of your medical bills if you were at-fault in an accident. It only covers expenses incurred by third-parties.
Personal injury protection is not the same as liability insurance. With PIP, medical costs are covered for the policyholders and anyone in their vehicle at the time of the incident, no matter who is at fault. With liability insurance, medical costs are covered for the third-party, not the policyholder, if it is determined that the policyholder is at-fault.
| Personal Injury Protection (PIP) | Liability Insurance |
| Covers the medical expenses from an accident for anyone in the policyholder's vehicle no matter who is at-fault | Covers medical expenses of a third-party if the policyholder is at-fault |
| Required in 12 states3 | Required in all states |
| Does not cover property damage | Covers property damage to a third-party's property if the policyholder is at-fault; does not cover damage to your property |
Liability insurance pays for injuries caused to another party, such as a pedestrian or the driver and occupants of another vehicle. It does not cover your own medical expenses if you caused the accident.
Liability insurance, which is required by every state (plus Puerto Rico and Washington, D.C.). PIP, which is only required in 12 states, is not a substitute for liability insurance.3
There's also professional liability insurance (PLI). Such policies are generally taken out by financial advisors, business owners, landlords, doctors, lawyers—anyone at risk of being sued for damages and/or injuries.