If you own a car, please do not select $15,000 in medical (PIP coverage). What’s that you say? You don’t know how much medical coverage you have? Well, it’s time to look at your policy right away (or least until after you read this blog post). The law dramatically changed this week for the worse and is already negatively impacting many NJ residents.
When you or your family member applies for or renews New Jersey automobile insurance, be sure NOT to select the minimal amount of medical (Personal Injury Protection “PIP”) coverage. The reason is that you could be on the hook for medical expenses arising out of a car accident even if it wasn’t your fault.
First, a little background of PIP or No-Fault insurance. It is offered in almost all car insurance policies and it is used to pay your medical bills, regardless of who is at fault for an accident. For many years, every policy included exactly $250,000 in medical expense benefits under PIP. Now, insurance companies offer “options” of PIP in smaller amounts – $15,000, $50,000, $75,000, and $150,000. And a Basic Policy would offer no PIP at all, except for emergency treatment and brain/spinal cord injuries. Every customer’s insurance quote will be different, but the savings that most customers receive from electing an “option” of the lower PIP amount is really a big rip-off. We have seen some cases where the difference in cost between a $15,000 PIP policy and a $250,000 PIP policy is as low as one dollar per month. For higher risk customers it will be higher, but regardless, it’s simply not worth it. If you are injured in an accident, a $15,000 PIP policy will be depleted very quickly. Many people assume that if they are hurt in a car accident the other driver’s car insurance will pay for the medical bills – this is not true. Your own car insurance is the one who pays for your own medical bills up to the amount of coverage you selected.
The New Jersey Supreme Court rule in March 2019, in a 3-2 decision, that motorists who opt for the $15,000 in PIP benefits, cannot recover medical expenses exceeding that amount. (For the lawyers interested in reading the case, it’s Haines v. Taft.)
So, imagine the following common scenario: You’re driving and stopped a red light. A distracted driver smashes into the back of your car. You or your family members are injured and require medical treatment. Your medical bills are $50,000, exceeding your $15,000 PIP limit. Who should be responsible to pay for your medical bills? Well, your own insurance company should pay the first $15,000, but then you’re on the hook and responsible for the remaining $35,000. Until the New Jersey Legislature acts to remedy this inequitable law, many people will be forced into collections and bankruptcy for their inability to pay for the medical bills from a collision that wasn’t even their fault.
Please look at your automobile insurance policy. If you have $15,000 in PIP coverage, please contact your insurance company and request higher coverage (ideally $250,000). Do NOT select health insurance primary. See our prior blog post on that topic for more info. It’s not much more money to obtain far better protection for you and your family. If you should have any questions or concerns about the type of coverage you have, feel free to reach out to our firm.
Michael Raff, Esq.