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Importance of Personal Injury Protection Coverage in NJ

automobile insurance policy

In New Jersey, Personal Injury Protection (PIP) coverage is mandatory for all drivers. It is designed to pay for medical expenses and other related costs for the driver and any vehicle passengers for injuries that are sustained in a motor vehicle or pedestrian accident. Examples of other related costs include lost wages while you are recovering and unable to work, costs to hire and pay for others to help you maintain your home while you are unable to do so yourself because of injuries (for instance, hiring a professional to clean your home, a landscaping company to mow your lawn and rake leaves in your yard while you are physically unable to do so because of injuries, as well as costs incurred to hire a snow removal contractor to shovel your driveway or sidewalk in front of your home while you are still recovering from your injuries).

The minimum amount of PIP coverage that you must have on your auto insurance policy in New Jersey is $15,000.00 per person, but this amount of PIP coverage is almost always inadequate and insufficient, especially if you or a loved one are seriously injured in a car accident. If a person sustains serious injuries in a motor vehicle accident, the coverage amount of $15,000.00 can easily be exhausted with a one or two night hospital admission, not including any surgery costs as almost all surgeries are billed by medical and hospital providers in amounts well in excess of $15,000.00, as is well known. For this reason, the attorneys at Gencarelli and Rimassa Law Firm, LLC always recommend to our clients that they carry at least $100,000.00 in PIP coverage per person on their auto insurance policy, if not more. Years ago, prior to revising and re-writing our state’s auto insurance laws in the late 1990’s, all New Jersey licensed drivers carried the standard amount of $250,000.00 in PIP coverage on their auto insurance policies.

However, since the late 1990’s and because of successful lobbying done by powerful multi-state auto insurance companies, auto insurance companies began selling much reduced, much less comprehensive auto insurance policies that provided PIP coverage as low as $15,000.00, all without significantly lowering insurance premiums, which should be no surprise to most New Jersey drivers. For this reason, the attorneys at Gencarelli and Rimassa Law Firm, LLC always recommend that our clients contact their auto insurance company to inquire about increasing their PIP coverage if they carry less than $100,000.00 in PIP coverage on their auto insurance policy, as well as recommending that our clients purchase the standard $250,000.00 in PIP coverage if they can afford to do so. Many times, our clients are surprised that it doesn’t cost that much more to increase their PIP coverage to $100,000.00 or even $250,000.00 per year, sometimes not much more than an extra $100.00 for the entire year. In all circumstances, all drivers in New Jersey must do what they can to carry at least $100,000.00 in PIP coverage on their auto insurance policies to provide a reasonable amount of PIP protection for themselves and their loved ones should they need hospital or medical care for injuries incurred in a car accident.

If your PIP insurance is not enough to cover the hospital, medical and other related expenses you have experienced because of your injuries, you may file a personal injury lawsuit against the negligent, at-fault driver to recover economic and non-economic damages, such as unpaid hospital and medical bills, and pain and suffering due to your injuries. If your PIP insurance coverage is exhausted in paying hospital and medical claims for your care, you may still have options for recovering compensation for your out-of-pocket medical expenses. You can contact your health insurance provider and find out if they will cover your medical treatment. While some of your treatment may be covered, you will still be responsible for co-pays, deductibles, co-insurance, and other out-of-pocket expenses. Importantly, if you have employer-provided health insurance that is an ERISA health insurance plan, while your employer-provided health insurance plan may pay for medical and hospital costs that are not paid by your PIP carrier because you exhausted PIP coverage, nonetheless your employer-provided health insurance plan, if it is a qualified ERISA plan, will almost always seek reimbursement against any settlement or other monetary recovery that you may obtain against the negligent, at-fault driver. Medicare and New Jersey Medicaid will also seek reimbursement against any monetary recovery or judgment you may obtain against the negligent, at-fault driver, but will forgive a certain percentage of the amount that they paid on your behalf for your medical care, usually forgiving about one-third (1/3) of the medical costs paid, although there are instances when the attorneys at Gencarelli and Rimassa Law Firm, LLC are able to reduce the asserted lien for our clients. The attorneys at Gencarelli and Rimassa Law Firm, LLC are also able to assist our clients in negotiating to reduce hospital and medical bills if requested by our clients to do so, and if we believe it will be in the best interests of our clients to get involved in such a negotiation process with medical providers.

The bottom line is that the attorneys at Gencarelli and Rimassa Law Firm, LLC strongly urge our clients to have at least $100,000.00 minimum in PIP coverage on their auto insurance policy and if possible, to have greater PIP coverage, up to the standard limit of $250,000.00. The amount of $250,000.00 in PIP coverage used to be standard, mandatory and required on all New Jersey auto insurance policies until the auto insurance laws were revised in the late 1990’s to largely, in our opinion, benefit powerful auto insurance companies. When you realize that $250,000.00 was the standard, mandatory PIP coverage that was required on all insurance policies twenty-five (25) years ago, and medical and hospital costs have increased tremendously in the past twenty-five (25) years, one can then realize how absolutely critical it is to have $250,000.00 in PIP coverage on your auto insurance policy if at all possible.

If you have any questions about PIP insurance coverage in New Jersey or want to discuss how your PIP benefits have been handled by your auto insurance company in a motor vehicle accident, please feel free to contact the attorneys at Gencarelli and Rimassa Law Firm, LLC for a consultation by calling us at 201-549-8737 or emailing us at [email protected] with any questions.

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