How Does Personal Injury Protection (PIP) Work in New Jersey?
Personal Injury Protection, or PIP, is part of New Jersey’s “no-fault” insurance system. PIP coverage pays for an injured driver’s medical and living expenses after he or she is involved in an accident. PIP coverage is available to a driver regardless of who was at fault for the accident. It is critical for all drivers in New Jersey to understand how PIP coverage works in the state.
What Does PIP Cover?
PIP benefits cover three categories of expenses that an injured driver may incur:
- Medical costs, including hospital services, surgery, medication, physical and occupational rehabilitation, diagnostic services, and ambulatory services
- Lost wages and essential services, including partially replacing wages that you lose out on due to missing time from work, and helping pay for essential services you cannot do yourself, like laundry, house cleaning, or lawn care
- Death benefits, which pays out the maximum coverage to dependent family members, in addition to $1000 for funeral expenses
PIP Coverage Limits
Under New Jersey law, PIP coverage limits start out at $15,000. However, policyholders may purchase up to $250,000 in PIP coverage. Regardless of how much PIP coverage you purchased, you are entitled up to the maximum of $250,000 if you suffer a severe brain or spinal injury until your injury stabilizes.
You are also required to pay a deductible, or a certain portion of your expenses you will be required to pay out of pocket. The standard deductible is $750, although you can purchase a lower deductible.
Finally, you can reduce your PIP coverage costs if you make your health insurance coverage primarily responsible for medical expenses you incur due to injuries suffered in a motor vehicle accident, with PIP benefits only kicking in for those expenses not covered by your health insurance.
How to File a PIP Claim
The policyholder and all members of their household are entitled to PIP coverage if they suffer a bodily injury while in a car, or if they are injured as a pedestrian struck by a car.
The insurance company will require a PIP claim to be filed as soon as practical after an accident. Insurers typically provide a 21-day grace period for notifying them of your PIP claim, and can begin to withhold a portion of your payment if you do not provide notice within 30 days of the start treatment. You forfeit any PIP benefits if you do not provide notice within 166 days of the start of treatment.
Choosing Between PIP Benefits and Health Insurance
New Jersey law allows you to select your health insurance as primarily responsible for medical expenses arising as a result of injuries suffered in a car accident, thereby allowing you to reserve PIP benefits for lost wages and essential services. Doing so can help decrease your insurance premiums. However, you will want to confirm that your health insurance will cover treatment for injuries suffered in a car accident, as some health insurance policies deny coverage for car accident injuries or have special provisions for those injuries. You may also have a higher deductible on your health insurance policy than the deductible on your PIP policy. Finally, if you are on Medicare or Medicaid you cannot make it primarily responsible for treatment of car accident injuries.
Limits on Right to Sue
As a no-fault state, New Jersey allows drivers the option to give up some of their rights to file suit following a car accident in exchange for lower insurance premiums. When you purchase your policy and select the “full tort” or “unlimited right to sue” option, you may sue an at-fault driver for non-economic damages, such as pain and suffering or lost quality of life. However, if you chose the “limited tort” or “limited right to sue”, you can only sue an at-fault driver for economic losses like medical expenses or lost wages or lost earning capacity; the only exception to this limitation is if you suffer dismemberment, disfigurement, permanent loss or loss of function of a bodily system, or loss of a fetus. Choosing the full tort option will likely significantly increase your car insurance premiums; you can lower your premiums by selecting the limited tort option if seeking compensation for pain and suffering isn’t a priority for you.
Contact a Nutley Personal Injury Lawyer to Discuss Your Motor Vehicle Accident Case in New Jersey
Did you or a loved one sustain serious injuries due to a motor vehicle accident in New Jersey]? Don’t let the medical bills pile up while you wait for the negligent party or their insurance company to do the right thing. Right now, you need an aggressive personal injury attorney on your side, fighting to get you the compensation you need, want, and deserve. The skilled attorneys at Birkhold & Maider, LLC represent clients injured because of motor vehicle accidents in Union County, Mercer County, Hudson County, Essex County, and throughout New Jersey. Call (973) 947-4670 or fill out our online contact form to schedule a free consultation about your case. We have an office conveniently located at 189 Franklin Ave., Suite 1, Nutley, NJ 07110, as well as offices in Hamilton.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.