You Need to Max Your Auto Insurance PIP Coverage in New Jersey Right Now!
“An ounce of prevention is worth a pound of cure.” Historians dispute whether the Ben Franklin axion refers to health or fire safety. In this case, it surely applies to auto insurance PIP coverage. A new Supreme Court ruling stands to hurt the pockets of many car accident victims. The dollar amounts could be off the charts.
No doubt you feel somewhat overwhelmed with the high cost of car insurance. Meanwhile, insurance experts rank New Jersey as 21st in average premiums. Nevertheless, that doesn’t help when it comes to an understanding of what you get for your money.
As you know, automobile insurance companies allow you to make selections for various types of coverage. Although it provides for some other critical benefits, Personal Injury Protection (PIP) covers payment for medical bills.
Under New Jersey law, you might elect to pay for as little as $15,000 in PIP coverage. Perhaps you figure your health insurance will pick up paying bills more than that amount. Maybe you’ve decided that you’re never going to get in a car crash and need the coverage.
The unfortunate fact is that they’re called accidents for a reason. Additionally, health insurance carriers put liens on personal injury claims. If you recover damages from the individual who caused your accident, count on reimbursing the cost of your medical bills.
Truth be told, you need to check your automobile policy and ensure you’ve selected the $250,000 PIP option. The increase in premium almost always works out to less than $100 per year. Meanwhile, our car insurance company will not expect repayment of the PIP benefits used to provide your medical care.
However, that’s not the only reason you’ll want to select maximum PIP limits. According to the New Jersey Supreme Court’s latest ruling, your ability to seek recovery for your unpaid medical expenses has everything to do with the dollar amount of your PIP coverage.
Supreme Court Rules on PIP Coverage
The Supreme Court’s decided Joshua Haines v. Jacob W. Taft on March 26, 2019. The ruling is based on a consolidated appeal involving two separate automobile accident injury victims.
Consider first the parties to the appeal. While driving his father’s car, Joshua Haines suffered injuries when another vehicle struck his automobile. Joshua did not have health insurance and used his father’s auto insurance PIP benefits to pay for his medical bills.
Meanwhile, the father’s automobile policy only provided $15,000 in PIP coverage. Not surprisingly, Joshua easily met and exceeded those limits. Reportedly, his outstanding medical bills amounted to approximately $28,000.
The second party to the consolidated appeal is Tuwona Little. She suffered injuries when another vehicle struck her car from the rear. Tuwona’s automobile policy also provided for nominal PIP coverage offering $15,000 in benefits. After exhausting those limits, Tuwona’s unpaid medical expenses exceeded $10,000.
Limitation on Lawsuits
Here’s something else you need to know. The automobile insurance policy in both of these cases limited Joshua’s and Tuwona’s right to sue for bodily injury. When the policyholders chose coverage, they selected the limitation on lawsuits option.
All things considered, the limitation on lawsuits option saves money as far as premium costs. That said, it severely restricts injured parties when it comes to suing for accidental harm. In this particular appeal, it seems that Joshua and Tuwoma needed medical care. However, their attorneys did not find their injuries met the standards stated in NJSA 39:6A-8(a) as far as noneconomic losses.
Medical Expenses as Economic Losses
In the meantime, both Joshua and Tuwona’s attorneys filed lawsuits against the parties that caused their accidents. In filing their personal injury claims, they cited their economic losses. More specifically, the claims sought payment for medical bills that exceeded their PIP coverage limits.
In each of the matters, the trial courts ruled against the plaintiffs and disallowed evidence of their medical bills that surpassed the $15,000 PIP benefit limits. Therefore, their lawsuits were dismissed.
Both parties appealed, and the Appellate Division consolidated the cases. The Appellate Division reversed the trial court opinions, concluding that the injured parties could introduce evidence of the bills more than the PIP limits to support fault-based claims for economic damages.
Once again, the case went up on appeal. However, this time, both defendants sought new consideration. The ruling from the state’s highest court provides the reason you need to ensure you maximize your PIP coverage lists maximum limits of $250,000.
Supreme Court Rules
Although the syllabus is not part of the legal opinion, the Supreme Court summed up the basis for its review of the consolidated appeal. The question of law follows:
Did the Legislature intend to deviate from its highly regulated no-fault system of first-party self-insurance to cover medical expenses arising from automobile accidents when it amended the statutory scheme to allow an insured to elect smaller amounts of personal injury protection (PIP) under a standard policy?
In determining the answer to this critical issue, the Supreme Court discussed the evolution of no-fault insurance in New Jersey. Meanwhile, the Court admitted that the law remains silent as far as the Legislature’s intentions when policyholders affirmatively choose a lesser PIP coverage option.
The Supreme Court’s majority position reached this important conclusion. “If the insured does not opt for $250,000 in PIP coverage, the insured with lesser-elected coverage cannot sue for unpaid medical benefits unless they exceed $250,000.”
However, you should know that not all of the Supreme Court justices agreed with the majority opinion. The dissenting opinion actually admits to the devasting impact this ruling will have on low-income insureds who choose lower PIP coverage as a matter of affordability.
How does the result of this consolidated appeal impact you? The bottom line is that you need to consider the risk in selecting your PIP coverage. More than likely, you can well imagine how easy it is to rack up medical bills in excess of $15,000.
According to Haines, you could get strapped with a whole lot of hospital and doctor bills if you’ve chosen the lower PIP option. Under New Jersey’s no-fault insurance, you can’t sue for uncompensated medical expenses until their dollar amount exceeds $250K.
Look at Your Policy NOW
No one plans to get into an automobile accident. Without question, few understand how automobile insurance works, especially considering no-fault laws.
If you’re in a car accident because of someone else’s negligence, it will hit home hardest. You’ll find it patently unfair that you’ll have to come up with thousands of dollars to pay for medical treatment you needed to get back on your feet.
That said, you need to look at your policy NOW. The dollars you save in initial premium costs mean little when it comes to facing medical bills over your coverage limit.
As a professional courtesy, the Law Offices of Beninato & Matrafajlo offers a complimentary automobile insurance policy review. Let us help you select benefits that will protect you in case you are injured in a car crash.
We can meet with you in person or discuss your car insurance options over the telephone. Contact us to set up a time when you are available to put your mind at ease.