The Difference Between PIP and Med-Pay Coverage

The Difference Between PIP and Med-Pay Coverage Can Affect How Your Personal Injury Case gets Settled.

Personal Injury Protection (PIP)

Texas Auto Liability Policy
Although PIP and Med-Pay sound similar, they are actually very different when it comes to settlement of your injury case.

Personal Injury Protection, also know as “PIP,” is coverage you purchase with your auto insurance policy that covers medical expenses and lost wages as a result of injuries sustained in a car accident.  Here are some of the main points about PIP coverage:

  • PIP is required under Texas law. The Texas Insurance Code, Chapter 1952, Subchapter D, provides that all policies of automobile insurance issued in Texas must provide for PIP coverage for a minimum of $2,500 per person, unless rejected in writing by the insured. Therefore, if you choose not to carry PIP coverage, then the insurance company is required to obtain your signed rejection of the PIP coverage.  Otherwise, you would be entitled to the minimum coverage even if you were never charged a premium for it.
  • Minimum Coverage.  Texas law requires that PIP coverage be provided at a minimum of $2,500 per person.  You may carry more coverage if you like.  However, the minimum coverage that must be provided by an insurance company is $2,500.
  • What if I’m at fault in the accident?  PIP provides “no-fault” coverage.  This means that you are entitled to PIP benefits regardless of fault in the accident.
  • Does PIP cover medical bills and lost wages?  PIP covers reasonable and necessary medical bills and 80% of your lost wages.
  • What if I’m at fault in the accident? PIP provides coverage to you even if the accident was your fault.  This is called “no-fault” coverage.

The Best Part of PIP coverage is that there are no rights of subrogation.

Do I have to re-pay my PIP benefits if I get a settlement?  No.  This is probably the best feature of PIP coverage.  Texas provides that PIP has no rights of subrogation or reimbursement in the event you get a settlement for your personal injuries.  Therefore, you can collect medical benefits on your PIP coverage and also submit those very same bills as part of your injury claim.  “Subrogation” is explained in more detail below….

Medical Payments Coverage (Med-Pay)

Med-Pay coverage operates differently than PIP.  It is coverage that is provided by your insurance company as a substitution for PIP.  However, as you will see, it may not be a good substitution:

  • Med-Pay is not mandated by Texas law.  You must specifically request Med-Pay coverage.  Additionally, Med-Pay coverage may be issued in any amount:  $500, $1,000, $2,000, etc.  There is no state mandated minimum.
  • Med-Pay does not cover lost wages.  Although Med-Pay also provides no-fault coverage, it only covers medical bills and does not cover lost wages.
  • Right of Subrogation for Med-Pay.  Unlike PIP, Med-Pay has a right of subrogation.  That means your insurance company has the right to get reimbursed from your personal injury settlement for the amounts they paid under your Med-Pay coverage.

Comparison Chart for PIP and Med-Pay



Required under Texas law



Must be rejected in writing



Minimum Coverage

$2,500 per person


Covers Medical Bills



Covers Lost Wages

Yes (80%)


Right of Subrogation



Provides No-Fault Coverage



More about Subrogation rights Between PIP and Med-Pay.

Unlike PIP, Med-Pay coverage is entitled to subrogation and reimbursement rights. Subrogation refers to the right of an insurance company to get reimbursed in the event you make a settlement with a liable third party.

An Example of Subrogation with PIP.

Let’s say you are injured in a car accident and have $5,000 in medical expenses.  You also carry $2,500 in PIP coverage on your auto policy.  Once you are done treating and are released from your doctor’s care, your lawyer will submit your case to the other driver’s insurance company.  Additionally, your attorney will submit your medical bills to your own insurance company for PIP benefits.

Having PIP coverage means that you walk away with more money when you settle your auto accident case.

If you settle your case for $7,500 with the other driver’s insurance company, you can also expect to get another $2,500 from your policy under the PIP coverage.  Likewise, your total recovery is $10,000.

An Example of Subrogation with Med-Pay.

However, if you had Med-Pay coverage, then your insurance company would be entitled to reimbursement of the $2,500 in Med-Pay benefits.

In the example above, if you collect the Med-Pay benefits of $2,500 and also enter into a settlement for $7,500 with the other driver’s insurance company, you would not have $10,000 in total funds to work with.  You would have to account for subrogation and would have to reimburse your insurance company for the Med-Pay benefits.  Therefore, you are left with a total recovery of $7,500.  In the end, you just paid premiums for Med-Pay coverage and received no real benefit from it at all.

This is the most important part of Med-Pay coverage that your agent may not clearly explain to you.

Get the PIP over Med-Pay.

So, the next time your insurance agent tells you that there is no real difference between PIP and Med-Pay coverage, don’t believe it. Get the PIP! The Med-Pay coverage is a waste of money.

Personal Injury Attorney in Dallas / Fort WorthConsult with an Auto Accident Attorney Now.

Robert C. Slim has been representing victims of car accidents in the Dallas and Fort Worth area since 1994.  If you are interested in this article, then chances are that you might have been injured in an auto accident. Get your FREE CASE CONSULTATION today!  Or, simply call 214-321-8225 and personally discuss your case with Robert C. Slim completely free of charge.

Related Articles:


The Relationship Between PIP and Uninsured Motorist Coverage

Personal Injury Protection (PIP)

14 thoughts on “The Difference Between PIP and Med-Pay Coverage”

  1. Pingback: What Is Subrogation? | Insurance Bulb

  2. I just want to thank you for your advices related due a difference between PIP and Med-Pay.
    I think you gave everybody excellent point of view let’s know which insurance is better and why.

  3. Daniel S Larimer

    Iam a Florida resident,and am required to carry PIP for my leased 2015 Nissan Sentra.Do i need to also have uninsured motorist coverage when i travel out of the state to Ohio.What additional coverage does uninsured coverage provide me,over just PIP coverage.How about coverage for a hit and run accident in and out of Florida.
    I have medicare insurance,and secondary medical coverage also.

    Should i be on the safe side and get uninsured coverage,even though it’s a hardship on my monthly payments.

    1. PIP just covers medical bills and lost wages (at least that’s the law in Texas). Uninsured motorist coverage is coverage for losses sustained (personal injuries and vehicle damages) as a result of a motorist who is uninsured or under-insured. It also covers “hit and run” accidents (again, that’s the law in Texas). You probably need to talk to an attorney or insurance agent in Florida to figure out what coverage options are available to you.

  4. I have some questions about PIP and UMBI in Texas.

    1) Is there any point to carrying a $100K/$300K UMBI limit if I have a $100K PIP limit? Here is a scenario: I am hit by an uninsured motorist and incur $100K in medical expenses. I claim under PIP and receive $100K from my insurance company. Would I be able to make a claim under UMBI as well for the $100K of medical expenses or would they offset and pay $0 under UMBI?

    2) Another scenario: I have a $100K PIP limit and a $250K/$500K UMBI limit.
    I am hit by an uninsured motorist and incur $150K in medical expenses. I claim under PIP and receive $100K from my insurance company. Would I be able to make a claim under UMBI for the additional $50K of medical expenses?

    1. You get the benefit of both coverages. Don’t look at PIP as a credit toward the UM coverage. Rather, PIP is credited against the value of your UM bodily injury claim. Let’s say you are injured in a car accident and have $50,000 in medical expenses. Then your PIP will pay for the medical expenses. However, if pain, suffering, mental anguish, disfigurement, physical impairment and all that stuff makes your claim worth $300,000, then your UMBI will kick in to cover the remaining $250,000 in claim value (up to your available UMBI policy limits).

      Unlike UM, PIP will pay even of the other car had insurance. Additionally, unlike your UM, the other driver’s carrier doesn’t get a credit for it. So, you actually get to collect your medical bills twice. I say carry both coverages with limits that you can afford and feel comfortable with. I hope this answers your question.

  5. Yes I have a problem which my insurance paid $10k of medical bills for an accident and USAa as a third party said they don’t have to cover this bills only the balance of accrued bills . How does that make it right to me when they cause the accident and her client was on the cell plus they send me $3000 for the whole settlement including balance bill :(. My bills were $12000 . I paid my pip just to be protected . Now my own insurance cover my bills for their fault ?

    Please help !

    Can you tell me what is right ?

  6. My wife was in an accident where she was at fault. We filed under our PIP coverage for the medical care (chiropractic and massage therapy), so that expense could be paid directly to the medical provider by our auto insurance. We later also filed a claim through her medical insurance for the care she received. The medical insurance provider initially would not pay the claim because they wanted to verify our auto insurance coverage and requested all sorts of documentation for the accident … which we provided. I informed them that we carried PIP and not med pay on our auto insurance, so they sent a payment to the medical provider which we decided to use as credit towards future chiropractic maintenance for my wife. Now the medical insurance has sent a request to the medical provider to request reimbursement for what they paid towards her medical expense stating the medical provider was paid twice for the same care and they have subrogation rights … Is that correct? I had thought PIP could not be subrogated … they are saying it can be because her medical insurance is an ERISA plan …

    1. Whether the PIP has a claim of subrogation or another party has a claim of subrogation against the PIP are two different questions. PIP has no right to subrogate (except in very limited circumstances, not applicable here). Therefore, if your wife makes a claim against someone else who was at fault in the accident, then PIP would not be allowed to subrogate against that claim. However, your health insurance may have a claim for reimbursement against the PIP. But, in your case, the PIP has already been paid. So, your health insurance would just pick up the medical bills where the PIP left off.

  7. I was physically assaulted as I sat inside of my vehicle while stopped at a light, by three thugs who flung my door wide open and began assaulting me. The assault continued outside of my truck, while my back was literally up against it. I filed a PIP claim with my insurance carrier, but they are denying payment of benefits, claiming that PIP only pays when someone is in a vehicular accident involving an impact of some sort.

    Bad faith?

    1. Your claim must arise out of the use or operation of a motor vehicle. Based on what you describe, your injury resulted from an assault and not a car accident or the operation of your automobile.

  8. My wife and I visited a chiropractor a number of times (we were not in accidents or anything) and used our insurance to cover the visits. The chiropractor told us our insurance would pay for a good pillow, some back braces, a tens unit, etc., so we said “sure.” So we received the items and thought nothing of it. A month or more later, we both get subrogation letters, asking us to answers questions about whether we’ve been in an accident, etc. This was farmed out to Equian on behalf of Blue Cross Blue Shield HealthSelect of Texas. I really don’t feel comfortable answering them. Thank you for any suggestions and comments.

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