You’ve been in a car accident, and you need medical care now. The question is, who pays for it?
New Jersey’s No-Fault Law
Under the state’s no-fault law, you’re the one responsible for your own medical bills – not the driver who caused the crash.
No-fault laws don’t mean that no one is at fault. Of course someone is! Instead, no-fault laws require the insurance company of each person injured in the accident to pay for their own policyholder’s medical costs, regardless of fault.
Should you have to pay for the consequences of the other driver’s irresponsible behavior behind the wheel? Absolutely not. But no-fault insurance coverage allows you to get your medical claim set up faster, so you aren’t waiting for the insurance companies to decide who is at fault before you can start getting your medical bills paid.
Personal Injury Protection
Pro Tip – Saving money by reducing your PIP coverage usually isn’t worth the extra medical costs you bear if you’re ever injured and need to use your insurance coverage.
Because basic and standard auto insurance policies sold in the state of New Jersey must comply with the no-fault law, they include a section of coverage known as personal injury protection, or PIP. PIP insurance covers your medical bills, but there are exceptions.
You are responsible for some of the costs, including a deductible you choose and a coinsurance percentage you must pay on the first $5,000 of medical expenses.
When you buy auto insurance, you purchase an amount of PIP coverage. PIP only covers your medical costs up to the limits of your policy. Most drivers on a standard policy purchase $250,000 in PIP coverage, according to the official New Jersey Auto Insurance Buyer’s Guide. However, some drivers reduce their PIP coverage as low as $15,000 to save on their premium costs.
When you purchase auto insurance, you also select whether PIP or your health insurance is the primary policy that will cover your medical expenses. It’s always best to choose PIP as primary. Once you exhaust your limited PIP coverage, your health insurance has to pay for your medical care, but if you choose health insurance as primary, all of the PIP coverage you purchased goes to waste, because you can never use it. Further, health insurance tends to charge higher deductibles, co-pays, and coinsurance than auto insurers are allowed to charge, and the health insurance company may limit you to a specific network of doctors.
What Expenses Does PIP Cover?
Your own PIP coverage is responsible for your medical expenses, including:
Emergency medical treatment at the hospital
Inpatient hospital stays resulting from your injuries
Inpatient or outpatient procedures and surgeries
Inpatient or outpatient rehabilitation, including physical, occupational, and speech-language therapy
PIP coverage is primarily for your medical bills, but some auto insurance policies include additional PIP benefits, including essential services, income continuation, and death and funeral expense benefits.
You probably don’t know offhand what selections you made on your auto insurance, and you may not fully understand these choices. That’s okay. A competent car accident lawyer can interpret your insurance policy for you and help you understand what benefits you’re entitled to through your own policy as well as what compensation you deserve from the other driver’s policy.
What Medical Costs Do I Have to Pay?
No matter how clear it is that the other driver is at fault for your injuries, you will be on the hook for paying at least some of the medical costs. Exactly how much you have to pay depends on the deductible you choose when purchasing auto insurance. Generally, you will pay higher premiums to keep your deductible low.
It isn’t fair that you have to pay the medical bills when someone else caused the crash. If you choose to pursue a claim, these out-of-pocket medical expenses are among the damages for which experienced car accident lawyers will seek compensation for you.