When making selections while purchasing your automobile insurance coverage, you may have noticed the term Personal Injury Protection, otherwise known by the acronym P.I.P. New Jersey is a “No Fault” state, meaning that regardless of who was responsible for causing your automobile accident to occur, your accident related medical expenses are required to be submitted for payment under the Personal Injury Protection portion of your own automobile insurance policy.
Whatis Personal Injury Protection?
Also known as no-fault insurance, Personal Injury Protection (P.I.P.) is a type of automobile insurance coverage that pays for medical expenses, lost wages, and other damages, no matter who was at fault in causing an automobile accident. P.I.P. coverage is in place in order to make sure that drivers and passengers have immediate access to the funds needed for their recovery after an accident, rather than having to litigate fault before being able to obtain medical treatment and benefits.
What Does P.I.P. Cover?
P.I.P. coverage goes well beyond just paying for your accident-related medical expenses. It can also cover other types of financial expenses, such as lost wages, essential services, and even a portion your funeral expenses, if necessary.
Here’s a closer look at what personal injury protection usually covers:
- Medical Expenses: P.I.P. covers hospital bills, surgery costs, rehabilitation, and other medical treatments needed because of injuries resulting from an accident.
- Lost Wages: If an injury from an accident prevents you from working, P.I.P. can cover a portion of the wages you have lost during your recovery period.
- Death Benefits: Benefits paid to eligible survivors.
- Funeral Costs: In the unfortunate event of a fatal accident, P.I.P. can cover a portion of your funeral expenses.
- Essential Services: If the injury makes it impossible for you to perform required daily tasks, like cleaning or childcare, P.I.P. may cover the cost of hiring someone to handle these responsibilities.
- Passenger Injuries: The P.I.P. benefits of your automobile insurance policy provides P.I.P. benefits to not only you, but also the passengers in your vehicle. You P.I.P. benefits may also apply to certain members of your immediate family who reside with you, even if they are not in your vehicle at the time of the accident.
Amounts of P.I.P. Coverage
Although you may opt to increase or decrease the amounts of P.I.P. coverage that you purchase on your automobile insurance policy, you will be given the standard amount of coverage unless you specify a different amount. For your medical accident-related medical expenses, you will automatically receive $250,000 in coverage. There will be a $250 deductible on that amount, and a 20% co-payment on medical expenses between $250 and $5,000. Afterwards, your P.I.P. coverage will pay 100% of your accident-related medical expenses from $5,000 to $250,000.
For your other P.I.P. coverages, such as income continuation benefits and essential services, you may also opt to increase or decrease the amounts of your coverage.
Health Insurance Primary
For most automobile insurance policies issued in New Jersey, P.I.P. coverage is mandatory. Your P.I.P coverage is primary, while any health insurance coverage you may have will be secondary, covering portions of your deductible and co-pay amounts. Some automobile insurance carriers will permit you to modify your automobile insurance policy to designate your health insurance coverage as primary over P.I.P. In return for doing so, you may receive a slight reduction in your automobile insurance premiums. Please note, however, that not all health plans will allow you to make this change, and you should check with your health insurance carrier before attempting doing so.
If you are involved in an automobile accident where your medical expenses are being paid by P.I.P., your automobile insurance carrier does not have an enforceable right of subrogation. That means that you do not need to repay them out of your portion of the net proceeds of your lawsuit. Depending upon the terms of your health insurance coverage, your health insurance carrier may have a right to be reimbursed out of your portion of the proceeds from your lawsuit for any accident-related medical expenses that they may have paid on your behalf. This may greatly reduce the amount of your net recovery.
The Advantages of P.I.P.
Some of the advantages of having P.I.P. include:
- Quick Access to Funds: P.I.P. means that you’ll have immediate access to financial assistance after an accident, regardless of fault, thereby allowing you to focus on recovery rather than financial stress.
- No Need to Establish Fault: With P.I.P., you don’t have to wait for fault for the accident to be determined before receiving compensation. It can be truly beneficial in complex accidents where the fault may be disputed.
- Covers a Range of Expenses: P.I.P. covers more than just medical expenses. It also compensates you for lost wages, required services, and other costs that might not be covered by standard health insurance.
- Protection for Passengers: P.I.P. extends coverage to passengers in your vehicle, making sure that they, too, have access to much-needed funds after an accident.
How Long Does it Last:
In New Jersey, your eligibility to have your medical expenses paid by P.I.P. remains in effect for 2 years following the date of your accident, or two years after your automobile insurance carrier has paid your last P.I.P. benefit, whichever expires first. In other words, you have 2 years from the date of your accident in which to apply for and receive P.I.P. benefits. If P.I.P. benefits are not paid with that 2 year time period, your eligibility got P.I.P. benefits will expire. Each time your P.I.P. carrier pays P.I.P. benefits on your behalf, the 2 year time period for eligibility starts all over.
Once you have exhausted your P.I.P. coverage, your health insurance coverage, if any, will then become your primary coverage.
Exceptions
In order to be eligible for P.I.P. benefits in New Jersey, your injuries must be related to an accident involving an automobile. This includes someone who is the driver of an automobile, a passenger in an automobile, or an accident which occurs while the person is entering into or alighting from an automobile.
To be eligible to receive P.I.P. benefits, your accident must involve the use of an automobile. Commercial trucks, motorcycles and vehicles for hire (such as Taxis) do not meet the definition of automobile. As a result, you may not be eligible for P.I.P. coverage while operating or riding in one of these classes of vehicles.
Even if the vehicle you are operating or riding in is an automobile, you may still be ineligible for P.I.P. coverage if you were doing so in the course of your employment. In that case, you may be eligible for Workers Compensation benefits, instead of P.I.P. benefits.
How are the Amounts of P.I.P. Benefits for Accident Related Medical Expenses Determined
In New Jersey, there is a P.I.P. Fee Schedule which sets forth the amounts that medical care providers are entitled to charge under P.I.P. If a medical care provider charges an amount over that which is permitted under the Fee Schedule, you are not responsible for the excess amount. In the event that a particular treatment is not covered by the P.I.P. Fee Schedule, then “Usual and Customary” rates for the geographical area apply.
Filing Requirements for P.I.P. Benefits:
In order to receive P.I.P. benefits, you should contact your automobile insurance carrier following an accident and request a P.I.P. claim number. This will be the claim number that you give to your medical care providers so that they can pre-certify your treatment and submit their medical bills. Your automobile insurance carrier will likewise send you a P.I.P. Application to fill out and return to them. While you need not wait for this application before treating, your automobile insurance carrier will not begin to process your medical bills until you have returned the completed application.
Legal Considerations and PIP
While this article has hopefully provided you with many of the basics concerning Personal Injury Protection coverage, there are many nuances and exceptions to these basic rules. Understanding how P.I.P. benefits work, as well as the respective obligations of both you and your automobile insurance carrier, are important in order to avoid being left with unnecessary outstanding medical bills and expenses following an automobile accident.
Being involved in an accident can be overwhelming. You should not have to also worry about how to get your treatment approved and your medical bills paid. Similarly, issues can arise when your P.I.P coverage is not sufficient to cover all of your accident-related medical expenses, or you do not have supplemental health insurance coverage to pay your deductible or co-payments. In those cases, having an experienced law firm can be invaluable in assisting you to navigate through the process.
For advice specific to your needs, reach out to Levinson Axelrod. Our experienced team of personal injury attorneys can help you through the post-accident process in order to ensure that you receive the full compensation and coverages for which you are eligible.
Call Levinson Axelrod at (732) 440-3089 or use our convenient online form to schedule a consultation today.