Explaining Personal Injury Protection (PIP)
PIP Covers Your Medical Bills: When you’re in an accident, your insurance policy covers your bills first. We’ll explain how the system works, and what we do when it doesn’t.
We Know How To Handle PIP: We have more than 25 years of experience handling car accident claims in New Jersey. Let us worry about PIP billing while you focus on getting better.
When a car accident turns your life upside down, we can help you get your life back
When you’re navigating the complex world of auto insurance – especially in no-fault states like New Jersey – PIP is one of the most important concepts you’ll encounter. Making the wrong choices about your PIP insurance could cost you big-time – possibly hundreds of thousands of dollars – in the event of an accident.
What Is PIP?
PIP stands for personal injury protection. This is a type of insurance coverage included in all auto insurance policies sold in New Jersey.
PIP is the portion of your insurance coverage that relates to injuries to the policyholder.
PIP doesn’t cover injuries that other people may sustain in a collision that you cause. A different type of coverage, called bodily injury, does this.
PIP also doesn’t cover damage to your car. The property damage portion of your auto insurance, or the other driver’s insurance, is responsible for this cost. PIP covers only your personal injuries – that is, the injuries you sustain to your person – and certain financial losses related to those injuries.
What does PIP cover?PIP primarily covers the cost of your medical treatment that results from an accident. The medical expenses PIP covers include:
- Hospital costs, such as emergency room visits, costly inpatient stays in trauma units, and emergency surgeries immediately following the crash.
- Appointments with providers such as physical and occupational therapists, chiropractors, orthopedic surgeons, neurologists, and practitioners in other specialties.
- Your ongoing treatment in the days, weeks, and months following the collision. If you undergo months of physical therapy and then find that you need surgery to make the best possible recovery, your PIP insurance is still responsible for paying these costs.
- Any medications prescribed to you as a result of the injuries you suffered in the accident, including pain medication, muscle relaxers, epidural steroid injections, and medications given to you while in the hospital.
- Any medical equipment, including prostheses, that you need because of your injuries.
Extra PIP CoverageYou can also purchase additional PIP benefits with your policy. This coverage is optional, so you might not have these benefits if you opted for the plan with the cheapest premiums.
Most drivers with a standard (not basic) auto insurance plan do purchase the extra PIP package, according to the New Jersey auto insurance buyer’s guide. However, some drivers decline the extra PIP package completely. Others choose the cheapest option of extra PIP coverage and get stuck with very little of this additional coverage.
The benefits available if you purchase the extra PIP package coverage include:
How Much PIP Coverage Can You Get?
PIP pays for your medical bills – but it doesn’t pay everything. How much coverage you have depends on the coverage limits you choose when setting up your policy.
In New Jersey, the standard auto policy comes with $250,000 in PIP benefits by default. However, policyholders can choose lower coverage limits. In New Jersey, even the cheapest basic auto insurance policy must include at least $15,000 of PIP coverage per person, per accident.
Why would a policyholder choose less coverage? Opting to reduce your PIP coverage limit also reduces your premiums. These short-term savings could cost you big time in the long run, if you ever get into a serious accident.
How Far Does Your PIP Coverage Go?
That $250,000 limit may seem pretty high – until you actually need coverage. The cost of medical care is outrageous, especially if you sustain severe or life-threatening injuries.
- $2,000 for an ambulance ride? Not out of the question. In fact, the cost could be more if you need more care, like a breathing tube, along the way.
- For years now, the average ER bill has been more than the average month’s rent.
- The most severely injured patients need constant monitoring in an intensive care unit. An ICU stay can cost more than $10,000 just for the first day. Every additional day racks up thousands more dollars in expenses. If your injuries are serious or you suffer complications, you could spend weeks in an ICU, with your medical costs climbing all the while. Expect higher costs if you need surgery (or worse, more than one surgery). Or if you require mechanical ventilation.
- After a serious accident, you might need to recover in an inpatient rehab facility. This stage of rehabilitation – getting you recovered enough to go home – can take weeks. All this time, you’re paying as much as $1,600 per day.
- Once you’re discharged home, you’re not “all better.” You’re simply better enough to get around your own home. You may not be able to drive, and your mobility might be severely limited. The road to recovery can require months of outpatient physical, occupational or speech-language therapy – increasing your costs by thousands of dollars more.
- There will be follow-up appointments. Tests to check how your injuries have healed. In the months and years after your accident, you could need additional surgeries.
Treating a brain injury can cost $85,000 to $3 million over a lifetime.
If you suffered a spinal cord injury, you can expect medical expenses to fall in the range of $347,484 to $1,064,716 (depending on severity) for the first year alone. After that, you’re looking at another $42,206 to $184,891 in medical costs every single year. Your lifetime costs are in the millions.
Suddenly, that $250,000 PIP coverage limit doesn’t sound like a luxury after all. And if you dropped your coverage down to a lower limit, like $15,000, your benefits could be exhausted long before you leave the hospital.
How Much Money Do You Owe Under PIP?
The good news about PIP is that you can count on your auto insurer to cover your medical expenses. You don’t have to worry about being denied coverage because the insurance companies decide that you are at fault (even if it’s not true), or because the driver who is at fault was uninsured.
The bad news? Some of the medical expenses are your responsibility, too. You’ll have to pay out of pocket – potentially thousands of dollars – toward your medical care.
There are two kinds of responsibilities auto insurance policyholders have in New Jersey with regards to their PIP coverage.
- Deductible: Your deductible is a flat cost that is always your responsibility to meet before the insurance company even begins to pay the bills. How much you owe for your deductible depends on the choices you made when setting up your auto insurance policy. Your deductible could be as low as $250 or as high as $2,500.
- Copayments: Your copayment is a portion of the medical bills you must pay. The dollar amount you owe changes depending on how much your medical bills are.PIP pays 80 percent of the first $5,000 in medical bills, and you are responsible for the remaining 20 percent. After that first $5,000, your insurance company pays the rest of the medical bills with no further costs to you, up to the PIP limits you elected.
The deductible and copayments combined make up your out-of-pocket maximum. This is the most you can be required to pay for medical care unless your medical bills are high enough that you exhaust your PIP coverage.
If you chose the lowest possible deductible, you’ll have to pay $250 before PIP kicks in, plus 20 percent of the costs of medical care you receive up to $5,000. A severe injury is sure to exceed that $5,000 threshold. This means you should expect to pay $1,200 out of pocket. (That’s your $250 deductible, plus 20 percent of the remaining costs up to $5,000.)
If you chose the highest deductible to save money on your insurance premiums, you’re going to end up paying far more out of pocket now than you would with a lower deductible. You’ll have to foot the bill for $3,000 of your medical expenses, even if you didn’t cause the accident before PIP begins covering all of the medical costs.
Is it fair that you have to pay for an accident you didn’t cause? No. Unfortunately, your insurance company is legally allowed to make you pay toward your medical costs. The only way for you to get back the money you had to pay out of pocket is to file a car accident lawsuit and get a settlement that’s enough to make you whole.
If you or a loved one were injured in a car accident, you’ve come to the right place.
- We have more than 25 years of experience helping car accident victims just like you successfully resolve their claims
- THIS IS WHAT WE DO- Every single day, we handle New Jersey car accident cases. We have the knowledge and experience to get you the best results possible.
- You will get better! Whether you need help figuring out where to turn for your medical problems or locating a specialist near you, we’re here to help. Getting you fixed and feeling like yourself again is our #1 priority.
- We go the extra mile to get your vehicle repaired and medical bills paid.
- We care because we know from experience what it’s like to be in a serious accident. We treat every client the way we would expect to be treated.
- Our No Fee Promise means you pay nothing until we win money for you.
Call us now and let us help with a free consultation!
Never Choose Health Insurance as Primary Coverage on an NJ Auto Policy
One more word of warning – if you’re looking to save money on your premiums, your auto insurer may suggest that you choose health insurance as your primary coverage for injuries rather than PIP.
Don’t do it.
Auto insurance companies offer this option because it saves them money, not because it’s truly in your best interests. There are many downsides to having health insurance primary. The negatives far outweigh any short-term savings.
Reasons Not to Make Health Primary
Don’t let your auto insurance company talk you into making health insurance primary. Otherwise, you could end up paying for PIP benefits you’ll never use, being limited in your access to medical care, spending more money out of pocket and still having to pay back your health insurer.
What to Do After an Accident
Understanding how PIP works before you have an accident is great, but unfortunately, many policyholders don’t even know what questions to ask until after being in a crash. If the reason you’re looking for information about PIP is that an accident has already happened, you need to know what to do next.
First of all, you should always call the police to the scene of an accident. You need documentation that the collision occurred. Also, don’t apologize for the accident or suggest that you are at fault in any way – especially if you’re not. Sometimes accident victims will blame themselves even when it’s the other driver who was negligent. You may not even know yet who is really to blame, so don’t make a mistake that you can’t easily undo.
Take your injuries seriously. If you are badly hurt, seek medical care right away. Even what at first seems like minor aches and pains could be a sign of something serious, so you should see a doctor just to be safe. Sometimes you might be so shocked by the crash that you don’t even notice the pain at first. That doesn’t mean that you’re in the clear, so don’t jump the gun and say that you’re “fine” just yet. You can decline an ambulance if you don’t think emergency care is necessary but stop short of saying that you are “okay,” and be aware of any changes in how you feel over the hours and days that follow the collision.
When you have a serious injury, it really is essential to have professional legal help on your side. Attorneys get their clients 3.5 times the amount of money unrepresented claimants get for themselves. We’ll also handle all of the hassle of filing the claim so you don’t have to. And we do it all without ever charging you out of pocket for your legal representation.
For questions about insurance coverage, legal rights, and options after an accident, call today. The consultation is free and we handle every claim on a no-win, no-fee basis, so there’s never a risk to you.