Personal injury protection, also known as PIP or no-fault insurance, covers your medical expenses and lost wages if you're injured in a car accident, regardless of who's at fault. PIP is often bought through your car insurance provider, but you may also buy it through your health insurance.
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What does PIP cover in New Jersey?
Personal injury protection is insurance coverage available either through your auto or health insurance that covers various expenses after an auto accident, regardless of who's responsible. These expenses include medical costs such as:
- Medication and prescriptions
- Rehabilitative and diagnostics services
- Hospital and ambulance expenses
- Treatment in accordance with religious traditions
PIP can also help recover lost wages after a car accident results in injury or disability. There are limits to this coverage, however. A basic policy provides $100 a week in lost wages, with the total coverage capped at $5,200. For services you cannot do yourself, such as lawn care, PIP pays up to $12 a day for a total of $4,380.
New Jersey PIP coverage also includes death and funeral expenses. If the eligible person dies in a covered accident, the next of kin is entitled to the policy's maximum lost income and essential service benefits. The next of kin also is entitled to funeral expenses up to $1,000.
Do I need PIP in New Jersey?
New Jersey law requires registered drivers to carry personal injury protection. The current required minimum amount of PIP is $15,000. There are two types of policies available to New Jersey drivers:
- Basic policy: This policy option provides the minimum coverage amount of $15,000. It is much cheaper than the standard policy, but it also has stricter limits.
- Standard policy: This is the most common PIP policy available to New Jersey drivers. It offers many coverage options while also letting you buy more PIP protection. A standard policy provides $15,000 in medical expense coverage as well as wage replacement, essential services and death benefits.
You can lower your PIP cost by choosing a higher deductible. A higher deductible means a lower premium, but it also means paying more out of pocket if you get into an accident.
Regardless of the deductible you choose, you'll still pay a 20% copayment for medical expenses. This is calculated by subtracting your deductible from $5,000. For example, say you have a PIP policy with a $250 deductible. You're involved in an accident that results in $10,000 in medical expenses. You'll pay the $250 deductible plus $950; 20% of the $4,750 from the first $5,000 of the expense total. Your out-of-pocket payment comes to $1,200. Your insurance company pays the remaining $8,800.
Since New Jersey state law requires personal injury protection, most auto insurance providers offer PIP coverage options. To get the best, cheapest PIP coverage, compare quotes from multiple providers.
How to file a PIP claim in New Jersey
If you are injured in a car accident, file your PIP claim as soon as possible. You will file through either your car or health insurance company, whichever provides your PIP coverage.
You'll submit your medical bills, as well as the bills of anyone else under your PIP coverage injured in the accident. You'll also include the following details:
- When the accident occurred
- All injuries sustained
- Your medical procedural history
If you're getting treatment from specialists not at the hospital, you'll want to file a claim for their treatment within 21 days from the first visit. If you don't follow the timeline, your payout may be reduced.
Personal injury protection vs. health insurance coverage
You can elect to make your health insurance your primary PIP coverage source. If you choose this route, your health insurance provider will pay first in the event of an injury from an accident. Your auto insurance policy will provide secondary coverage. This is a good way to save money, as your auto insurer will lower your premium if you make your health insurer your primary PIP resource.
If you're using your health insurance provider as your primary source of PIP, you'll want to make sure your health insurance policy covers injuries due to car accidents. Medicare and Medicaid can’t be used for this purpose, but may be allowed if your medical expenses exceed your car insurance PIP limits.
If you are without health insurance and you're in an accident, your car insurance provider may offer PIP coverage, but there will be an extra $750 deductible.
Full tort and limited tort options in New Jersey
Drivers in New Jersey can sue for injuries and damages after an auto accident. When choosing your PIP policy, your options are full tort or limited tort.
Full tort: Allows you to sue any driver for pain, suffering and medical expenses tied to an accident they cause.
Limited tort: Allows you to sue for medical damages, but not pain and suffering. There are some limits to coverage, such as exclusions for loss of a body part or a permanent injury.
Limited tort is a more affordable option, but it also offers less coverage than full tort.
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