A new report by the New Jersey Department of Banking and Insurance reveals some auto insurance companies writing policies in the state may not be offering proper coverage options under the law. The insurance bad faith tactics never seem to end. Section 39 of the New Jersey Statutes Revised requires all auto insurance providers in the state to set the default coverage limit for personal injury protection (PIP) coverage for standard private automobile policies at $250,000. PIP coverage pays for medical expenses incurred in an auto accident up to the policy’s coverage limit. Unless policy holders say, in writing, that they want lower PIP coverage limits, the law requires insurance companies to set policy limits at $250,000.
Some insurance companies are displaying lower PIP coverage limits – as low as $15,000 – as the first or default options when consumers are purchasing auto insurance. The worst offenders appear to be those companies offering online purchase options with coverage defaults on websites dipping well south of mandatory defaults, according to the Department of Banking and Insurance.
Why are insurance companies willfully shorting consumers out of their coverage limits? Money. Offering the state minimum PIP coverage of $15,000 helps insurance companies potentially avoid paying out hundreds of thousands of dollars in medical bills from auto accident injuries. This strategy, as underhanded as it is, allows insurance companies to reap higher profits at the expense of policy holders who don’t realize they’re not receiving the coverage options the law requires.
The minimum coverage standard for PIP can vanish quickly in the wake of a serious car accident. The average cost of an emergency room visit requiring critical care is about $20,000, according to Cost Helper, a consumer information and advocacy website. If a driver only has the minimum PIP coverage and needs an average trip to the ER after an accident, the hospital could be knocking on the door with a bill for the outstanding $5,000 in medical bills. Worse yet, the injured driver may go without needed medical care because the insurance policy is already exhausted. The consequences are serious and can affect every aspect of an accident victim’s life.
If you’ve been injured in an accident, you need the services of trusted New Jersey car accident attorneys who can advocate for your rights to compensation. Facing a billion-dollar insurance company alone is an impossible battle. Having an experienced legal team on your side can help you obtain the medical care you need and win deserved compensation for your accident claim.