The liability portion of the policy protects the insured when the insured is at fault. The insurance company defends the insured, and pays the injured party up to the limits of the insured’s liability coverage.
The PIP (Personal Injury Protection) portion of the policy pays medical expenses for the insured up to the limits of the insured’s Personal Injury Protection. This is the portion of the policy that pays your medical expenses when you are injured in a motor vehicle accident and have yet to settle with the at-fault driver. Personal Injury Protection will likely also pay medical expenses if the insured is injured as a pedestrian or injury as a passenger in someone else’s vehicle. There may also be a wage loss provision in the PIP portion of the policy that provides payment if the insured is unable to work for a period of time following a motor vehicle accident.
UIM (Uninsured Motorist/Underinsured Motorist) is the portion of the policy that compensates the insured if the at-fault driver is uninsured or if the at-fault driver does not have sufficient insurance to fully compensate the policyholder for her/his injuries.