Personal Injury Protection (PIP) in New Jersey Auto Insurance

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What Is Personal Injury Protection (PIP)?

Defining PIP in New Jersey

Personal Injury Protection, or PIP, is a required part of New Jersey auto insurance policies (except in rare Basic Policy exceptions). It pays for your own medical expenses and other costs after a car accident, no matter who caused the accident.

How No-Fault Insurance Works in NJ

Under New Jersey’s no-fault insurance law, you must first turn to your own insurance—your PIP—after an accident. This applies even if the other driver was entirely at fault. The law is designed to make medical care accessible right away, without waiting for legal proceedings or fault determinations.

What Does PIP Cover in New Jersey?

PIP in NJ offers more than just basic medical coverage. Here’s what it includes:

Medical Expense Benefits

PIP pays for all reasonable and necessary medical treatment related to injuries sustained in an auto accident. This includes:

1. Hospital visits and surgeries
2. Diagnostic testing like MRIs and X-rays
3. Physical and occupational therapy
4. Chiropractic care
5. Rehabilitation services
6. Prescription medications
7. Medical devices and equipment

Income Loss and Wage Reimbursement

If you can’t work due to accident-related injuries, your PIP may reimburse a portion of your lost income. You’ll need:

1. Medical proof from a doctor
2. Verification from your employer
3. A qualifying injury under your policy terms

Essential Services Benefits

If your injuries prevent you from performing regular household tasks like cleaning, cooking, or childcare, PIP may reimburse the cost of hiring help.

Death and Funeral Benefits

If the accident results in death, PIP can provide funeral and burial expenses as well as survivor benefits for dependents who relied on your income.

How Much PIP Coverage Should You Choose?

Minimum Required Coverage

New Jersey mandates a minimum of $15,000 per person, per accident in PIP benefits. While this satisfies the legal requirement, it may not be sufficient for moderate or severe injuries.

Available PIP Limit Options

Policyholders can opt for higher limits of $50,000, $75,000, $150,000, or $250,000. Some policies even offer unlimited coverage for catastrophic injuries like spinal cord damage or traumatic brain injury.

Factors to Consider When Choosing a Limit

When deciding on your PIP limits, think about:

1. Whether you have health insurance and how robust it is
2. Your likelihood of being in an accident (e.g., commute length, driving habits)
3. Your financial ability to handle out-of-pocket costs
4. Whether you have dependents who rely on your income

Understanding the Standard vs. Basic Policy

What Is a Basic Policy?

The Basic Policy is a low-cost insurance option that offers minimum protection. It includes $15,000 in PIP coverage, little or no bodily injury liability protection, and no right to sue unless the injury is catastrophic.

What Is a Standard Policy?

The Standard Policy is the most commonly chosen option. It includes higher PIP coverage options, bodily injury liability, and lets you choose between lawsuit limitation options (verbal threshold or zero threshold). It’s more expensive but provides significantly more protection.

What’s the Difference Between Verbal and Zero Threshold?

Verbal Threshold: Lawsuit Limitation Option

If you select the verbal threshold, you limit your right to sue for non-economic damages like pain and suffering unless your injuries meet certain criteria, such as:

• Loss of a body part
• Significant disfigurement or scarring
• Permanent injury
• Death

Zero Threshold: Unlimited Right to Sue

With the zero threshold, you can sue for pain and suffering regardless of the severity of your injuries. This option offers broader legal rights but usually results in higher premiums.

Should You Choose PIP or Health Insurance as Primary?

Coordination of Benefits: Health Primary vs. PIP Primary

You must decide whether your health insurance or your auto policy’s PIP will be the primary payer of medical bills after an accident.

Health Primary: Lower Auto Premiums

If you choose health insurance as primary, your health plan pays first, and PIP pays second. This choice typically reduces your auto insurance premium, but it may lead to:

• Out-of-network restrictions
• Co-pays and deductibles
• Delays in care approval

PIP Primary: Faster, Broader Coverage

With PIP as primary, your auto policy pays first, and usually processes claims more quickly and with fewer restrictions. This option costs more but can make recovery smoother.

What About Deductibles and Co-Payments?

How Deductibles Work in NJ PIP Policies

When you use PIP benefits, you first have to pay a deductible, which can range from $250 to $2,500. A higher deductible reduces your monthly premium but increases your out-of-pocket responsibility after a crash.

Understanding the 20% Co-Pay Rule

After your deductible is met, most NJ PIP policies require a 20% co-payment on the next $5,000 of medical expenses. That means even with insurance, you may owe up to $1,000 in co-payments depending on the cost of care.

Does PIP Cover Passengers and Pedestrians?

Passenger Coverage Under PIP

If you’re driving with passengers who don’t have their own auto policies, your PIP coverage may apply to them as well. If they have their own policies, those will typically pay first.

Pedestrians and PIP Eligibility

Pedestrians struck by a vehicle are usually covered by either:

• Their own auto policy’s PIP
• The PIP policy of the vehicle that hit them (if they don’t own a car)

PIP ensures that every injured party has immediate access to medical benefits after a crash, even if they weren’t inside a vehicle.

Optional and Expanded PIP Benefits

Why Add Optional Coverage?

Standard policies allow you to expand your PIP benefits. While this increases your premium, it offers critical financial protection for extended injuries.

Examples of Optional PIP Add-Ons

1. Higher medical expense limits
2. Increased income continuation benefits
3. Enhanced essential services reimbursement
4. Funeral expense benefits for your family

If you have dependents or a physically demanding job, these add-ons can provide a safety net that basic coverage won’t.

Common Mistakes People Make with PIP

1. Choosing Minimum Coverage Without Thinking Long-Term

Many policyholders simply select the lowest available PIP limit to save money—only to find themselves underinsured when serious injuries occur.

2. Not Coordinating Health and Auto Insurance Correctly

Failing to properly select your primary medical coverage can delay care and increase out-of-pocket costs. Always double-check your coordination of benefits forms with your insurer.

3. Ignoring Wage and Essential Services Benefits

People often assume their job will cover time off or that they don’t need assistance at home—until they do. These benefits are crucial and frequently underestimated.

4. Overlooking Threshold Choices

Some drivers select a verbal threshold without realizing how much it limits their legal options if they are seriously injured in a crash.

Protect Your Health and Your Rights

Choosing the right PIP coverage in New Jersey is about much more than checking a box on your insurance form. It’s about protecting yourself, your family, and your financial future. With the right coverage, you’ll have access to timely medical treatment, income replacement, essential services, and possibly the right to pursue legal compensation.

Taking the time now to fully understand your PIP options will prepare you for the unexpected. A few extra dollars a month can mean thousands saved—and peace of mind—after an accident.

Frequently Asked Questions About PIP in New Jersey

What is Personal Injury Protection (PIP), and why is it required in New Jersey?
Personal Injury Protection, or PIP, is a mandatory component of most auto insurance policies in New Jersey. It is designed to cover your medical expenses and certain out-of-pocket costs, such as lost wages or essential services, after an automobile accident—regardless of who was at fault. PIP is required under New Jersey’s no-fault insurance law, which aims to streamline medical care and reduce the need for lengthy legal disputes following car crashes.

How much PIP coverage am I required to carry in New Jersey?
The minimum required PIP coverage in New Jersey is $15,000 per person, per accident. However, policyholders have the option to increase that coverage to $50,000, $75,000, $150,000, or even $250,000. In cases of particularly severe or catastrophic injuries, policies may automatically provide up to $250,000 in medical expense coverage regardless of the stated limit.

Does PIP cover lost wages if I can’t work after an accident?
Yes, PIP can compensate for lost wages if your injuries prevent you from working. The standard policy typically covers up to 80% of your lost income, subject to a maximum weekly amount and an overall cap based on the limits you’ve selected. To receive this benefit, you will need documentation from your doctor confirming your inability to work, as well as verification from your employer regarding your wages and job responsibilities.

Can I use my health insurance instead of PIP to pay for medical bills?
You can opt to use your health insurance as your primary source of medical coverage after an accident, but only if you select the “health primary” option when purchasing your auto insurance policy. This choice can lower your auto insurance premium, but it also means you’ll be subject to your health plan’s rules, such as copays, deductibles, network restrictions, and pre-authorization requirements. If you don’t make this selection, your auto insurance policy’s PIP will serve as the primary payer for medical bills related to a car accident.

Does PIP coverage apply to passengers and pedestrians?
Yes, PIP typically extends to passengers in your vehicle who don’t have their own auto insurance and to pedestrians who are injured by your insured vehicle. If a passenger has their own policy with PIP coverage, that policy usually pays first. Pedestrians without auto insurance may be covered by the policy of the driver involved in the accident. This broad coverage ensures that individuals who are injured, even outside the vehicle, still have access to medical benefits.

Contact The Epstein Law Firm, P.A., Today

If you’ve been injured in a car accident or are unsure about how your PIP coverage works, it’s critical to speak with a personal injury attorney. 

Don’t wait. Contact The Epstein Law Firm, P.A., today for a free consultation and let a professional help you protect what matters most.