New Jersey is a no fault insurance state, which means that your own insurance is responsible for paying certain damages from the accident, including medical treatment, regardless of fault. In New Jersey, all drivers must purchase Personal Injury Protection (PIP) which covers medical bills and optionally lost wages. There are several different options for PIP coverage and drivers may choose if PIP benefits or their own health insurance as the primary insurer.
When deciding which PIP options to choose, make sure you thoroughly understand your own health insurance policy and your car insurance policy options. In this blog post, we’ll walk through PIP options and the pros and cons of using PIP or your own insurance as the primary insurer.
Standard vs Basic PIP Options in New Jersey
The minimum amount of personal injury protection insurance a driver must purchase in New Jersey is $15,000 -- regardless of whether or not they choose the Basic or Standard policy. Drivers can opt for coverage amounts as high as $250,000 with a Standard policy. Keep in mind, these coverage amounts are intended to pay for your medical expenses and optionally lost wages if you are injured in an auto accident. Even for relatively minor injuries, $15,000 may barely put a dent in the medical expenses.
Under a Basic policy, there are some exceptions for traumatic brain injuries, spinal cord injuries, or disfigurement in which the policy would cover up to $250,000 of medical expenses. Additionally, a basic policy includes any medically necessary treatment rendered at a trauma center or acute care hospital immediately after an accident, and only until the patient’s condition is stabilized in accordance with a treating physician’s judgment.
Do I Need High PIP Coverage Even If I Have Health Insurance?
In short, yes, you must buy PIP coverage in New Jersey, regardless of whether or not you have health insurance. Depending on your situation, there may be many benefits to a high PIP coverage amount and choosing PIP as the primary insurer, even if you have health insurance, such as:
Compensation for Lost Wages. PIP covers more than your medical bills. When you file a PIP claim, you may be able to recover compensation for any time away from work while you are receiving treatment. In the event of a fatal accident, PIP may pay for any funeral or burial costs.
PIP Doesn’t Have Network Restrictions. Many private insurance options and managed plans have a network of healthcare providers and hospitals at which the insurance plan is accepted. In the event of an emergency after an accident, you may receive treatment at an out-of-network hospital or from an out-of-network provider, thus resulting in large co-pays or a complete denial of coverage. Unlike many private insurance plans, PIP pays medical bills so long as the treatment is deemed medically necessary.
Your Health Insurance Plan May Not Cover Vehicle Accidents. It's very important to check your medical insurance policy to ensure that it covers your care in the event of a car accident. Many will expect that you have PIP insurance and will not cover your care.
You Cannot Choose Medicare or Medicaid as Your Primary. If you have a Medicare or Medicaid plan for health insurance, you must choose PIP as your primary insurer.
PIP and Deductibles
If you choose your own health insurance as the primary insurer, in the event of an accident, you would be responsible for any deductibles and copays until your medical insurance limits are reached. Only then, would PIP kick-in as the secondary insurer.
If you choose PIP as your primary, you can optionally choose a deductible to reduce your rates. As with any insurance decision about deductibles, make sure you could really afford that amount in the event of an accident that prevented you from working.
According to the Department of Banking and Insurance for the State of New Jersey, most drivers in the state purchase $250,000 worth of PIP coverage, which is higher than is common for drivers in other states.
After an Accident
Even though New Jersey is a no-fault state and your own insurance will cover your losses after an accident, that doesn’t mean the process is straight-forward. Insurance companies may still devalue or deny your claim. If you have questions about your insurance coverage after an accident, contact the New Jersey car accident attorneys at Brandon J. Broderick, Attorney at Law.
When you hire our attorneys, you are assured a passionate team fighting for your best interest and putting your needs first. We work on contingent fees that are only collected if we win your case. If we don’t win, you don’t pay. Contact us for a free consultation. With our proven track record of success with car accident settlements and our commitment to client care, we can turn your setback into a comeback.