That coverage is called Personal Injury Protection, or PIP. How much it pays, what you owe out of pocket, and what happens when it runs out all depend on choices made when the policy was bought. Here is how it works.
This is general information about New Jersey law, not legal advice for your situation.
PIP pays first, whoever was at fault
New Jersey is a no-fault state for medical expenses. Every New Jersey auto policy must include PIP, and it covers reasonable and necessary treatment for crash injuries: the ambulance, the emergency room, surgery, doctor visits, physical therapy, tests and prescriptions. The at-fault driver’s insurance doesn’t pay your hospital bill as it comes in. Instead, you open a PIP claim with your own company, give your providers the claim number, and they bill your insurer.
PIP usually covers you, and relatives who live with you and don’t have their own auto policy, whether you were driving, riding as a passenger, or walking when a car hit you. If you have no policy of your own and none in your household, the PIP on the car involved may cover you. When in doubt, ask before assuming you are uncovered.
How much PIP you have
On a New Jersey standard policy, PIP limits are chosen per person per accident:
- $15,000, the legal minimum;
- $50,000, $75,000 or $150,000;
- $250,000, which applies automatically if no lower amount was chosen.
Many people believe the minimum is what most drivers carry. In fact, $250,000 is the default when no other choice is made. Even with a lower option, certain catastrophic injuries, such as a permanent or significant brain injury, a spinal cord injury or disfigurement, are covered up to $250,000.
Drivers on the low-cost Basic Policy have $15,000 of PIP, with up to $250,000 available for those same serious injuries. People on Medicaid may carry the Special Automobile Insurance Policy (SAIP), which covers emergency treatment and certain serious injuries only.
Your declarations page, usually the first page of your policy, lists your PIP limit, deductible and other choices. Find it now.
What you pay out of pocket
PIP isn’t always free at the counter. The standard deductible is $250, unless the policyholder picked a higher one ($500, $1,000, $2,000 or $2,500) to lower the premium. After the deductible, you generally pay a 20% co-payment on expenses between the deductible and $5,000. Above $5,000, PIP pays the covered amount up to your limit.
If you made health insurance primary
Some policyholders choose to make their health insurance pay first for crash injuries, in exchange for a lower premium. If you did, your health plan is billed first, with its own network rules, deductibles and co-pays, and PIP picks up covered costs the health plan doesn’t pay, up to your PIP limit. Medicare and Medicaid can’t be made primary. If you chose this option, confirm that your health plan covers auto-accident injuries before relying on it.
Choosing a doctor
You can generally choose your own doctors. But PIP insurers use a “Decision Point Review” plan, which may require you or your provider to get approval before certain tests and treatments, such as MRIs or a long course of therapy. Skipping a required step can reduce what PIP pays. Ask your provider’s office whether they handle PIP precertification, and keep copies of every approval or denial letter. If PIP denies treatment your doctor says you need, the denial can be challenged, including through PIP arbitration.
When PIP runs out
Serious injuries can use up a $15,000 or $50,000 limit quickly. When PIP is exhausted, a few things can happen:
- Health insurance may pick up further treatment, subject to its own rules.
- A claim against the at-fault driver may include medical bills above your PIP limit, along with lost wages and other losses.
- Pain and suffering compensation depends on the lawsuit option on your policy. With the common “limitation on lawsuit” option, you generally need an injury in one of the categories the law lists, such as a permanent injury, a significant disfigurement or a displaced fracture.
In most injury cases, New Jersey allows two years after the injury to file a lawsuit, so don’t wait for PIP to run dry before getting advice. See the New Jersey car accident statute of limitations.
Steps to protect your coverage
- Report the crash and open your PIP claim promptly. Our step-by-step checklist for after a crash covers the first days.
- Give every provider your PIP claim number.
- Keep every bill, explanation of benefits and denial letter.
- Cooperate with your own insurer, but think before giving the other driver’s insurer anything. See should you give the insurer a recorded statement?
Questions about a PIP claim?
Raffi has handled personal-injury cases since 1993, including thousands of motor vehicle accident cases, from soft-tissue neck and back injuries to catastrophic ones. Learn how the firm handles car accident claims, or browse the FAQ.
The consultation is free. Cases are handled on a contingency fee, which means no attorney’s fee unless money is recovered for you; you may also choose to pay hourly. If there is no recovery, you may still be responsible for case costs, as explained in your retainer agreement.
Call any time, 24/7, at 855-RAFFI-25 (855-723-3425), or send a message. Can’t come to the office? Call, and Raffi can come to your home at no charge. The firm serves clients in English and Spanish.
Frequently asked questions
Does the at-fault driver’s insurance pay my hospital bill in New Jersey?
Not at first. New Jersey is a no-fault state for medical bills, so your own PIP coverage pays first, whoever caused the crash. Medical costs above your PIP limit may later be part of a claim against the at-fault driver.
How much PIP coverage do I have?
It depends on what you chose. On a New Jersey standard policy, PIP can range from $15,000 to $250,000 per person, and $250,000 applies if you made no choice. Your declarations page shows your limit, deductible and whether you made health insurance primary.
What if I don’t have a car or auto insurance?
You may still be covered. PIP on a policy held by a relative you live with can cover you. If no household policy applies, a passenger or pedestrian may be covered by the PIP of the car involved. The answer depends on the facts, so check before you assume there is no coverage.