New Jersey is one of just a dozen states with no-fault auto insurance laws, meaning that in the event of a car accident, medical expenses will be paid out by your insurance company.

No-fault auto insurance laws were put in place to enhance the benefits that people injured in auto accidents receive and to ensure prompt payments, which can be held up by the legal process and liability investigations in states without mandatory no-fault coverage.

What is PIP?

No-fault coverage is provided under the personal injury protection (PIP) portion of your insurance policy.

This will cover the cost of medical treatment and equipment, including rehabilitation, ambulatory services, surgical and hospital expenses and medicines, as the result of a car accident.

PIP coverage will also reimburse you for lost wages resulting from the accident and other expenses related to your injury, such as hiring someone to mow your lawn, shovel snow or do the laundry. Coverage for these types of tasks maxes out at $12 per day. Lost wage coverage starts at $100 a week for the most basic policy and is available at up to $5,200 per week.

What if I’m injured as a passenger?

In New Jersey, coverage for medical claims is always paid through your own insurance policy, regardless of who is responsible or what vehicle you are in. Even as a passenger in another person’s vehicle, your own insurance policy will cover your medical bills. If you exceed the limits in your policy, you may be able to seek coverage under the vehicle owner’s or driver’s policy.

What if I already have health insurance?

Unlike some states with no-fault insurance, New Jersey allows you to select a policy that will designate your health insurance provider as the primary insurance for medical coverage from injuries resulting in an accident.

If you have a solid health insurance plan that covers auto accidents (some don’t—check!), this could be a great option – saving you up to 25% in PIP premiums for each vehicle insured under your policy.

For more details on no-fault insurance in New Jersey and what the best options are for your situation, contact John B. Wright Insurance.