What is No Fault Insurance and How Does a Claim Work?
Roads and highways in New Jersey are packed with commuter traffic, trucks and out-of-state visitors. As the most densely populated state, New Jersey has more than its fair share of traffic, which means that in-state drivers have a higher-than-average risk of being involved in a car accident. New Jersey is one of several states to adopt a no fault insurance law for auto accidents. This statute, known as the Automobile Insurance Cost Reduction Act of 1998, is designed to prevent most accident injury cases from entering the court system. Theoretically, this enables injured drivers and passengers to receive compensation for injuries and lost wages faster.
Careless drivers, speeders and individuals who talk on their cell phones while driving are responsible for causing a large number of accidents. In New Jersey, your insurance company is responsible for covering your emergency medical expenses regardless of who caused the accident.
After being involved in an accident that was not your fault, you are faced with many struggles. You are in pain and may be hospitalized—you then learn that the at-fault driver will not be held responsible for your medical bills, adding to the extreme stress you are under. The reason the responsible driver’s insurance will not cover your medical bills is due to the fact that New Jersey is what is known as a ‘No Fault’ state.
What Does ‘No Fault’ Mean
What the ‘No Fault’ law states is that each driver involved in an automobile accident is responsible for his or her own medical bills either through their own auto insurance policy or health insurance. It does not matter if you were at fault for the accident or not, you will still have to cover your own medical expenses.
The section of your policy that will cover these costs is known as ‘personal injury protection’ or PIP insurance. In the case that you have listed PIP as primary on your insurance policy, this will cover your medical expenses up to the limit you have chosen before the costs are placed on your health insurance policy.
What does PIP mean?
When you are purchasing your auto insurance policy you will be able to choose how much PIP coverage you would like—the standard is $250,000, but you can adjust it higher or lower. They will then ask if you would like PIP to be primary or your health insurance policy. It is very likely that your insurance company will try and convince you not to put PIP as primary by informing you that they charge higher rates for having PIP as primary. Despite the extra expense with regard to your monthly premium, PIP as primary is the better choice in the long run because if you are injured in an accident you will want to have access to those funds for your medical costs.
If you do not choose to have PIP as primary, you will never have access to that coverage regardless of what level of coverage you chose. Paying extra for additional PIP coverage, above the $250,000 standard, will be of no consequence if it is not primary. In the case of pursuing a personal injury claim following your car accident, since you utilized your health insurance coverage rather than the auto policy, the health insurance company can then place liens on your settlement demanding reimbursement for the costs they covered that would have been covered by PIP.
So, essentially not choosing PIP as primary will then translate into less of a recovery in a personal injury claim because the health insurance company has a right to seek reimbursement for the costs they covered.
Understanding Auto Insurance in New Jersey
With all of the loopholes and coverages within a New Jersey auto insurance policy, it can be very confusing as to how this will all affect you in the long run.
Contact a Bergen County No Fault Accident Lawyer
If you have any questions about your policy or if you have been injured in a car accident, call the lawyers at Maggiano, DiGirolamo & Lizzi today at 201-585-9111, or contact us today with our quick inquiry form. We will explain your coverage options and how that will affect your personal injury claim.
If you or a loved one has been in a car accident, you know that the financial impact is immediate. There are medical bills that need to be paid. Missed work means missed wages, which means difficulty covering the day-to-day costs of living. You need help with these costs right away. You cannot wait for a lawsuit to be filed. That is what no-fault insurance is for.
At the law office of Maggiano, DiGirolamo & Lizzi, our attorneys have decades of experience handling car accidents. We understand the various insurances that are relevant and how they work together. We know that you need help right away. That is what we are here for.
How No Fault Insurance Works
In any car accident case, there may be numerous different insurances that are relevant. In the end, the negligent driver’s insurance will be critical. At the beginning, however, no-fault insurance is extremely important. No fault is your own insurance. Every car on the road has to have an insurance policy that will pay medical bills and lost wages for people in the car, regardless of who was at fault.
There may be a limit on the amount no-fault insurance will cover. The minimum is $50,000. You may have more, depending on your policy. Our lawyers’ goal is to get coverage from the other insurances involved before that amount runs out.
Medical Bills and Lost Wages
No fault will cover all medical bills. The insurance company does have the right to send you to their doctor to determine whether the treatment you require is reasonable and necessary. Taking the proper steps, including having your primary care provider refer you to a specialist, may minimize the possibility of the insurance company requiring an independent medical exam.
No fault will cover 80 percent of lost wages. However, this coverage is not taxed, so the take home will be similar to your paycheck. There is a monthly maximum.
Contact a New Jersey Accident Lawyer
If you have any questions about your policy or if you have been injured in a car accident, call the New Jersey auto accident lawyers at Maggiano, DiGirolamo & Lizzi today at 201-585-9111, or contact us today with our quick inquiry form. We will explain your coverage options and how that will affect your personal injury claim.
