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What Does No Fault Insurance Mean

March 2, 2015

Hoyt_Image_Insurance_filefolder_101314.jpgYou may be surprised to learn that the insurance company of an at-fault driver does not have to pay for medical bills for injuries he caused.

New Jersey is a “no-fault” state. This means, in New Jersey, your insurance company pays for your own medical bills regardless of whose fault the accident was. It does not matter if the other driver was entirely at fault or if you were at fault. Your medical bills will be paid for by your insurance. The idea behind “no-fault” insurance is for car accident victims to receive medical care quickly without having to first wait until a decision is made on whose fault the accident was.

Your insurance coverage is commonly known as Personal Injury Protection (PIP). The usual coverage under PIP is $250,000. The standard insurance policy usually has the policyholder pay the first $500. Then the policyholder pays a 20% co-pay up until $5000. Anything over $5000 is paid for 100% by the insurance company. Your PIP coverage comes from your own car insurance first. So, if you own a car, your insurance company will pay your medical billseven if the accident occurred when you were in someone else’s car. If you do not own a car, your PIP coverage may come from a resident family member’s insurance. If you do not own a car and no one in your family owns a car, PIP coverage will come from the insurance company of the vehicle you were in when the accident occurred. Please remember, filing a claim under your PIP coverage does not make your insurance rate go up.

Also note, if you are injured in a car accident you can go to any doctor you want and receive any test you want without having to ask permission of your insurance company. All medical bills from the first ten days after the accident will be covered. After the first ten days, you may need to receive permission from the insurance company before receiving any further treatment. After the ten days, insurance companies follow standard treatment plans and procedures which your medical providers need to follow in order for you to continue having your medical bills covered.

In addition to having your medical bills covered, you are also entitled to lost wage benefits and the cost of household services, etc.

[1] N.J.S.A. 39:6A-4.

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