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No-Fault Doesn’t Mean No One Is At Fault: New Jersey requires no-fault policies so that there’s never any question which covers your medical bills.

You Can Still File A Personal Injury Claim: If you were seriously injured in a car accident and the other driver was at fault, a no-fault policy doesn’t mean you can’t file a claim.

When a car accident turns your life upside down, we can help you get your life back

To drive in the state of New Jersey, you need car insurance. There are dozens of policies and insurance companies to choose from, but they all have to meet minimum state standards.

The state requirements change over time, but since 1972, all auto insurance plans sold in New Jersey must be no-fault policies.

What Is No-Fault Insurance?

A no-fault policy means that your insurance plan always covers your medical bills. It does not matter who is at fault for causing the crash. If you need medical treatment, your policy pays for it.

The section of your policy that covers your medical costs is ‘personal injury protection,’ or PIP, insurance. Like other options on your plan, you can choose how much PIP coverage you want to purchase. Most drivers choose $250,000. Choosing a smaller policy keeps your premium low, but you’ll have less money to cover bills when you get in an accident.

What Are The Benefits Of No-Fault Insurance?
The largest benefit of no-fault insurance is that it allows you to get the medical help you need when you need it. In the days after an accident, getting timely care is crucial for recovery. Without a no-fault policy, you might have to pay for treatment out of your own pocket until the insurance companies involved determine who’s at fault for an accident.

Importantly, no-fault does not prevent you from seeking compensation if the other driver caused the accident. You can still file a claim for damages. All this policy does is help streamline the process of getting you the care you need.

What Is PIP Insurance?

Personal Injury Protection helps pay for the medical and other personal costs from your car crash. You won’t use your PIP plan to pay to repair your car or cover the medical costs of your passengers or the other driver. The policy only covers your personal costs.

What Expenses Will PIP Cover?

The primary purpose of PIP insurance is to cover your medical bills, including doctor visits, medication, and recovery. However, the policy covers other personal costs, including:

  • Lost Wages: A serious injury might prevent you from returning to work. PIP coverage helps make up for not having that salary. Depending on your coverage, this can be between $100 and $5,200 a week. If the accident is fatal, PIP insurance pays out a portion of your lost wages to your family. However, the amount of lost wages compensation available through your PIP coverage is often not enough to fully make up for the income you will lose. Even in states with no-fault auto insurance, many accident victims must pursue a personal injury claim to recover the full amount of income they lose due to an injury.
  • Essential Service Benefit: This benefit helps make up for the cost of hiring someone to perform a task you would do if you weren’t injured, such as hiring someone to mow the lawn or wash your laundry. PIP caps this coverage at $12 a day.
  • Death Benefits: If you die in a car accident, your PIP plan will pay your next of kin. Unlike your lost wages, the only thing required for the death benefit is proof of death. Most plans offer a flat $1,000.
  • Funeral Benefits: PIP plans offer up to $1,000 towards funeral costs in the event of death.

The size of your PIP policy determines what money you have available when you get in an accident. In New Jersey, the minimum amount of PIP coverage a plan can have is $15,000, though most residents carry $250,000 or more.

Many frugal drivers try saving money by reducing their PIP coverage. While it’s true this can save you money on your premiums; it means you might not have the coverage you need if you do get in an accident.

New Jersey Car Crash Attorneys

If you or a loved one have serious injuries from an automobile accident, seek medical attention. Then give us a call.

We have more than 20 years of experience helping our clients with their personal injury claims. Recovery can be a long, difficult journey, but you will get better. We’ll help.

Always Set PIP As Primary

After choosing how much PIP coverage you would like, you’re asked if you would like PIP or your health insurance policy be primary. It is likely that your insurance company will recommend or suggest you put your health insurance as primary. They’ll warn that making PIP primary increases your premium.

Yes, having your PIP policy be primary will increase your premiums, but you should do it anyway. In the long run, this is almost always the wiser choice.

What does setting a policy as primary mean?

Man with neck pain after a car accident

When you get in an accident, your bills first go to whatever policy you set as primary. After you use up that insurance, the other policy takes over.

This means that if you set your health insurance policy as primary, it gets billed first. Most health plans have high deductibles you have to pay before your policy kicks in. In a serious accident, you’ll exceed your out of pocket maximum, meaning you’ll owe the hospital thousands of dollars.

More importantly, if you don’t have PIP set as primary, you won’t have access to those funds. Ever. Modern health insurance plans have no spending caps, meaning you never exhaust your coverage. If you choose to pursue a personal injury claim, your insurance company may get reimbursed out of your settlement.

So, not choosing PIP as primary will essentially translate into less of recovery in a personal injury claim because the health insurance company has a right to seek reimbursement for the costs they covered.

That’s why your car insurance company discourages you from setting PIP as your primary. If they convince you to take the lower premium, they never have to pay for your medical costs, even though you’re paying for a policy. They get your money and don’t have to give it back. It might be good business, but it is terrible policy.

Common Questions About No-Fault Plans

What Are The Negatives Of No-Fault Insurance?

One of the reasons New Jersey enacted its no-fault insurance policies was to help manage insurance costs by limiting what you could sue an insurance company for. That’s why it’s difficult to file a personal injury claim unless you have evidence of a serious injury.

But lawmakers wanted to make sure that you’d have the ability to get treatment for your injuries even if they weren’t considered serious enough to sue. They solved this by requiring personal injury protection policies.

If I'm Not At Fault, Why Do I Have To Pay?

You didn’t cause the crash, so it does seem weird at first that you have to use your insurance plan to pay. But this is a good thing. When you’re in an accident, you know you have insurance to cover the cost because you’re the one who purchased it.

After the police determine who’s at fault for your injury, you have the ability to file a claim and get compensation.

Does PIP Cover All Of My Medical Bills?

One of the options you select when you purchase a car insurance policy is how large you want your deductible to be. Your deductible is the amount of money you have to pay out of pocket when your in an accident before your insurance policy pays anything.

After your deductible, most PIP policies say you’re responsible for 20% for the first $5,000 of medical bills that result from your accident, minus your deductible.

Once you hit this out-of-pocket amount, you are no longer responsible for additional medical bills related to the accident. The insurance company pays the remaining bills, up to the level of Personal Injury Protection you selected on your policy.

So, if you chose to purchase low levels of PIP to save money on insurance, you or your insurance will have to pay any bills that remain once the costs exceed your PIP coverage limits.

Will No-Fault Insurance Hurt My Premiums?

No, your rates won’t go up after an accident if you’re not at fault. Remember, the “no-fault” part of your policy is about who pays your medical bills, not who is responsible for the accident.

Can My Insurance Company Deny PIP Coverage?

Like any health insurance policy, each plan has a list of procedures they will and will not cover. If you want to seek treatment the insurance company doesn’t see as necessary, the insurer will not cover it.

If you are drunk or under the influence of illegal drugs during the accident, the insurance company can deny your claim. Companies can also deny your claim if you own an uninsured vehicle.

Finally, insurance companies can deny your claim if you wait too long to seek treatment. This is why we always recommend you see a doctor even if you feel fine after your accident. If your injuries don’t show symptoms right away, you might not seek treatment until it’s too late.

What Happens If I Don't Have Health Insurance?

PIP will still pay for your injuries even if you don’t have health insurance. However, we recommend you always have health insurance because medical bills pile up quickly.

Once you use up your PIP policy, you’re responsible for your medical bills. Filing a personal injury claim can help recover those costs, but reaching a settlement takes time. Until then, you need to pay these expenses out of pocket. Recovering from a serious injury can cost hundreds of thousands, or millions, of dollars.

What Is The Automobile Insurance Cost Reduction Act?

In 1998, New Jersey lawmakers passed the Automobile Insurance Cost Reduction Act, hoping to reduce insurance premiums. In the process, however, they limited your options to get the care you needed in the event of an accident.

The AICRA created limits on the damages you could seek in a personal injury claim. The bill also allowed insurers to create “limited plans” that offered small premiums in exchange for underwhelming coverage.

What is Full Tort Vs Limited Tort?

Your car insurance plan gives you the option between choosing “limited” or “full” tort.

Limited Tort means that you waive your right to sue for pain and suffering in exchange for lower premiums. You still have the ability to seek compensation for things like your lost wages and medical bills. However, you can’t sue for the emotional and mental costs of your injury. There are exceptions to this limit in the case of serious or permanent bodily injury.

Full Tort means that you do not waive any rights to compensation. Unfortunately, most insurance companies charge you more for this option.

New Jersey Auto Accident Injury Lawyers

With all of the loopholes and coverage options in a New Jersey auto insurance policy, filing a claim can be very confusing. You’re left wondering what to do next and how your injuries will impact you in the long run.

You just want to get your life back on track, but you’re not sure where to start. That’s why you want an advocate like Console and Associates fighting for you. We have more than 25 years of experience helping thousands of clients. We understand New Jersey auto accident law, and we’re committed to helping you.

When you work with us, we treat you like we’d want someone to treat our own family. You will get better. You will get your life back on track. Your well-being is our top priority

Our no-win, no-fee promise means that you’ll pay nothing for our help unless and until we successfully settle your claim.

Call us now and let us help with a free consultation!

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Article Reviewed By Richard P Console Jr.

richard-console-featured-imageThis article was professionally reviewed by Richard P Console Jr, an attorney licensed to practice in New Jersey, New York, and Pennsylvania.

Mr. Console has more than twenty-five years of experience practicing personal injury law and successfully resolving vehicle accident claims on behalf of his clients.

Learn more About Richard P Console Jr.

While this information was reviewed for accuracy, it should not be considered legal advice. Every claim is different. If you are thinking of pursuing a personal injury claim and have a question, contact us directly.