How do medical bills in car accident cases in New Jersey get paid?

As part of the state's no-fault insurance system, Personal Injury Protection (PIP) ensures that individuals injured in auto accidents receive prompt medical treatment and financial support, regardless of who is at fault. 

This mandatory coverage helps drivers manage medical expenses, lost wages, and other essential services without the need for lengthy legal battles.

What is Personal Injury Protection (PIP)?

Personal Injury Protection (PIP) is part of auto insurance that provides coverage for medical expenses and, in some cases, additional costs such as lost wages and essential services, regardless of who is at fault in an accident. 

In New Jersey, PIP is designed to ensure that individuals injured in automobile accidents receive quick medical treatment without the need to establish fault.

PIP is mandatory in New Jersey

In New Jersey, PIP coverage is a mandatory requirement for all drivers. The state's no-fault insurance system mandates that every vehicle owner must purchase and maintain PIP as part of their auto insurance policy. 

A no-fault insurance system means that after an automobile accident, each driver's own insurance policy is responsible for covering their medical expenses and related costs, regardless of who caused the accident. This system aims to reduce the number of lawsuits arising from auto accidents by limiting the circumstances under which an injured party can sue the at-fault driver. 

However, there are exceptions that allow for legal action in cases of severe injury or specific conditions.

Coverage details of New Jersey's PIP

The key components of PIP coverage include:

Medical expenses:

• Hospital visits and stays, including emergency room visits and inpatient care.

• Surgical procedures resulting from accident-related injuries.

• Medications required for treating injuries sustained in the accident are included in the coverage.

• Diagnostics, such as X-rays and MRIs, as well as ambulance services needed immediately after the accident.

• Rehabilitation services, including physical therapy, to aid in recovery.

The standard PIP policy in New Jersey provides up to $250,000 in medical expense coverage per person, per accident. 

However, you have the option to select lower coverage limits, such as $15,000, $50,000, $75,000, or $150,000, which may result in lower premiums but could be insufficient in the event of a serious accident. It must be noted that when purchasing auto insurance, consumers may choose to make their health insurance primary over PIP.  This is NOT advisable because health insurance carriers seek reimbursement at a later time for the services they provided from any proceeds that you might receive in a personal injury settlement.  On the other hand your insurance carrier will not seek reimbursement for bills that are processed through PIP if you win your lawsuit or settle the case.  

Income continuation benefits:

PIP offers income continuation benefits to compensate for lost wages due to injuries from an auto accident. 

The default coverage provides $100 per week, up to a maximum of $5,200. You can opt for higher benefit levels, which would increase the premium.

Essential services benefits:

If injuries prevent you from performing daily tasks, PIP provides essential services benefits to cover the cost of hiring help. 

This includes services such as housekeeping, childcare, and lawn maintenance. The standard benefit offers reimbursement of up to $12 per day, with a maximum limit of $4,380. Proof of payment to a third party for these services is usually required.

Death and funeral benefits:

In the unfortunate event of a fatality resulting from an auto accident, PIP provides death benefits to the dependents of the deceased. Additionally, it covers funeral expenses up to a specified limit.

It's important to carefully consider their coverage options and select limits that align with your needs and financial situations. While opting for lower coverage limits can reduce premiums, it may also lead to insufficient coverage in the event of a serious accident.

Understanding the PIP system in New Jersey

Select the appropriate coverage limits:

• Minimum coverage options: New Jersey mandates a minimum PIP coverage of $15,000 per person, per accident. However, you can opt for higher limits, up to $250,000, to ensure adequate protection in the event of severe injuries.

• Factors to consider when choosing limits: Consider factors such as your health insurance coverage, financial situation, and potential medical expenses resulting from serious accidents. Higher limits offer greater protection but come with increased premiums.

Understand deductibles and co-payments:

Standard deductible amounts: You can choose from various deductible options, typically ranging from $250 to $2,500. A higher deductible can lower your premium but will increase out-of-pocket expenses in the event of a claim.

Selecting a higher deductible reduces your insurance premium but means you'll pay more out-of-pocket if an accident occurs. 

Coordination between PIP and health insurance:

• Choosing primary medical coverage: New Jersey allows you to designate your health insurance as the primary payer for auto accident injuries, with PIP acting as secondary coverage. This choice can lead to premium savings but requires careful consideration of your health plan's terms.

• Implications for claim processing and costs: If you select your health insurer as primary, ensure your health plan covers auto accident injuries. Be aware of potential additional costs, such as a $750 deductible, if your health insurance denies coverage.

• It must be noted that when purchasing auto insurance, consumers may choose to make their health insurance primary over PIP. This is NOT advisable because health insurance carriers seek reimbursement at a later time for the services they provided from any proceeds that you might receive in a personal injury settlement. On the other hand your insurance carrier will not seek reimbursement for bills that are processed through PIP if you win your lawsuit or settle the case.  

Filing a PIP claim

1. Promptly notify your insurance company after an accident. New Jersey law requires claimants to submit medical bills within 90 days of treatment to ensure coverage.

2. Gather and submit all relevant documents, including medical records, bills, proof of lost wages, and police reports, to support your claim.

3. Common issues include disputes over medical necessity, claim denials, and processing delays. Maintain thorough records, adhere to filing deadlines, and consider consulting with a legal professional if disputes arise.

Limitations on the right to sue

Full tort vs. limited tort options: New Jersey offers you a choice between the "Limitation on Lawsuit" option, which restricts the right to sue for non-economic damages except in severe cases, and the "No Limitation on Lawsuit" option, which preserves unrestricted rights to pursue such claims.

Even with the "Limitation on Lawsuit" option, you can sue for non-economic damages if injuries result in death, significant disfigurement, dismemberment, loss of a fetus, or permanent injury.

Some frequently asked questions

Can I sue another driver for my injuries under New Jersey's PIP system?

Under New Jersey’s no-fault system, your ability to sue for non-economic damages (like pain and suffering) is limited unless you select the "No Limitation on Lawsuit" option or meet specific injury thresholds, such as death, permanent injury, or disfigurement.

How do I file a PIP claim after an accident?

To file a PIP claim:

• Notify your insurance company immediately after the accident.

• Submit required documents, including medical bills, proof of lost wages, and accident reports, within the required timeframe (typically 90 days).

What happens if my PIP coverage limit is exceeded?

If your medical expenses exceed your PIP coverage limit, you may need to rely on health insurance, personal savings, or pursue legal action against the at-fault driver for additional compensation.

Does PIP cover passengers in my car?

Yes, PIP typically covers passengers in your vehicle, as well as pedestrians injured by your car, under New Jersey's no-fault insurance system. However, if your passenger has PIP through their own auto insurance policy, then that policy would be primary to satisfy their bills.  

Can I change my PIP coverage options?

Yes, you can adjust your PIP coverage limits, deductibles, and lawsuit options when renewing your auto insurance policy or by contacting your insurer.

What should I do if my PIP claim is denied?

If your claim is denied:

• Request a detailed explanation from your insurer.

• Provide additional documentation to support your claim.

• Consult with an attorney if disputes persist.

Summary

Understanding New Jersey’s Personal Injury Protection (PIP) system is essential for all drivers. PIP ensures prompt medical coverage, wage replacement, and additional benefits after an auto accident, regardless of fault. 

It is a part of the state’s no-fault insurance system, protecting you from financial strain while promoting quick recovery. 

At Gonzalez & Polanco, LLC, Attorneys at Law, our team has nearly three decades of expertise in personal injury and insurance law. We provide personalized legal services to help clients understand their rights, file claims efficiently, and address disputes effectively - all while ensuring compliance with New Jersey’s PIP regulations.

Whether you’re dealing with a denied claim, exploring your legal options, or need assistance understanding your PIP coverage, our bilingual team is here to help. Contact us at 732-442-2500 or schedule a consultation through our website. Let us guide you in protecting your rights and securing the compensation you deserve.