Understanding Personal Injury Protection Insurance in New Jersey

By Staff Reporter May 27, 2020 12:19 PM EDT

In most states, liability for injuries sustained in a car accident is determined by who was at fault for an accident. But, New Jersey and some other states have changed this system so that liability is more about insurance and less about fault.

In New Jersey, every standard automobile liability insurance policy is required to include up to $250,000 in "no-fault" auto insurance, referred to as Personal Injury Protection (PIP). Depending on the level of coverage you purchase, PIP will provide three types of benefits after a car accident:

1. Medical Expenses

Necessary medical expenses needed for the diagnosis and treatment of injuries sustained by the policyholder, their passengers, and/or anyone driving their car with permission, up to the policy limit.

2. Lost Wages

Lost wages in an amount depending on the level of coverage you purchase - from $100 per week to $5200 per week, not to exceed your normal income. Also, PIP will pay up to $12 per day if you are unable to perform essential tasks such as cooking, cleaning, and doing the laundry.

3. Death Benefits

If someone covered under the policy dies due to injuries sustained in the car accident and was the primary income provider, PIP will provide up to $1000 for funeral and burial expenses. Furthermore, the decedent's surviving spouse, children, or next of kin will receive whatever benefits the decedent would have been entitled to receive if he or she had lived.

PIP insurance will provide the aforementioned benefits to you and/or anyone insured under your policy who was injured as a result of the accident (and sometimes pedestrians injured by your car) regardless of who is at fault.

So, if you are in an accident and it is entirely someone else's fault, your PIP coverage will still provide benefits to those insureds under your policy- which, for purposes of PIP, covers just about any driver or passenger in your car-caused by the accident, even though you were not at fault. Furthermore, PIP will even provide benefits to someone who is at fault for the accident. In other words, fault is irrelevant. Hence, the term "no-fault" coverage.

Keep in mind, however, PIP coverage pays for medical bills, lost wages, and funeral and burial costs, but it does not pay for "pain and suffering" and other non-monetary damages.

Here are a few additional things you should know about PIP insurance in New Jersey:

The Default PIP Option in New Jersey

New Jersey requires auto insurance providers to offer a $250,000 (per person, per accident) coverage limit as the default option for PIP, but also allows motorists to choose reduced coverage limits of $150,000; $75,000; $50,000; or $15,000 per person per accident.

A Basic Auto Insurance Policy in New Jersey

Motorists in New Jersey must carry at least a "Basic Policy," which includes:

$5,000 in Property Damage Liability coverage; and
$15,000 in Personal Injury Protection coverage, per person, per accident.

Bear in mind, the Basic Policy does not include Bodily Injury Liability coverage, nor are you required to carry Bodily Injury coverage. However, you may purchase $10,000 in Bodily Injury liability coverage to add to your Basic Policy. Furthermore, the Basic Policy only entitles the insured to a limited right to sue for losses above and beyond their policy limits.

Limited or Unlimited Right to Sue After an Accident in New Jersey

For more coverage, motorists in New Jersey may choose to purchase a Standard Policy, which includes:

As low as $5,000 and as high as $100,000 or more in Property Damage Liability coverage;
As low as $15,000 and as high as $250,000 or more in Personal Injury Protection coverage, per person, per accident; and
As low as $15,000 per person and $30,000 per accident, and as high as $250,000 per person and $500,000 per accident in Bodily Injury Liability.

Furthermore, if a motorist purchases a Standard Policy, they are entitled to choose between a policy with a "limited right to sue" and one with an "unlimited right to sue".

A "limited right to sue", which is the cheaper option, prohibits the insured from suing the at-fault driver for non-monetary damages, such as pain and suffering, unless certain exceptions apply. The Basis Policy comes with a limited right to sue only.

An "unlimited right to sue", which is the more expensive option, places no restrictions or limits on the insured's ability to sue the at-fault driver to recover compensation for any damages sustained as a result of the accident.

Why Consult with an Experienced New Jersey Car Accident Lawyer?

In New Jersey, it is every motorist's responsibility to choose correctly when it comes to the appropriate auto insurance limits and "right to sue" option for his or her needs. Choose incorrectly and you may be in deep water if the losses you sustain as a result of a car accident exceed your coverage limits.

Our experienced New Jersey car accident lawyers know how to deal with insurance companies that don't pay car accident victims their fare share. We know how to get you the compensation you deserve for your injuries and losses. Call us today, to find out how we can help.