A recent decision from the New Jersey Supreme Court regarding the state’s Personal Injury Protection (PIP) auto insurance system has been stirring significant debate and concern among motorists, medical providers, and legal professionals.
Though some believe the ruling bars auto accident victims from recovering unpaid medical bills over the limits of a $15,000 PIP policy, we’d like to reiterate that may not always be the case – and that there are ways to ensure you’re fully covered in the event of the unexpected.
Haines v. Taft
The ruling in question stems from a New Jersey Supreme Court case, Haines v. Taft, which concerned an auto accident involving individuals with $15K in PIP insurance coverage. Generally, PIP works as follows:
- Under New Jersey law, PIP is a type of no-fault auto insurance coverage that can help injured car accident victims pay for medical expenses, regardless of who’s at fault. Though the default amount of coverage is $250K, New Jersey motorists can select a lower amount of PIP coverage in order to lower their premiums, with the minimum amount set at $15K.
Prior to the ruling in Haines, victims who carried $15K in PIP coverage and incurred more than $15K in medical bills associated with their injuries were permitted to seek a recovery of the excess unpaid medical expenses from the at-fault party – such as the negligent driver who caused their wreck.
In Haines, NJ Supreme Court Justices ruled 3-2 that vehicle accident victims who elected to carry $15,000 in PIP coverage could not recover medical expenses which fall between their PIP limit (i.e. $15K) and the statutory default limit of $250K. The case involved a claim solely for the unpaid bills and was unequivocal in the ruling that if that was the only claim, then such a claim was barred by law.
What was left unclear and subject to interpretation was whether that ruling would apply to all cases where the limits were $15,000 or if there is an exception when the injured individual was able to show a permanent injury and make the claim for medical bills in conjunction with that claim. Presently, there seems to be a split of opinion, with some Judges seeing there being an absolute bar and some Judges believing that the restriction only applies to claims that are for the medical bills only.
Though the decision involves divided arguments about New Jersey’s auto insurance laws, legislative intent, and judicial interpretation, it has sparked considerable concern for many motorists. As attorneys who represent motor vehicle accident victims throughout the state, we’d like to remind locals that the law is not yet settled; the Supreme Court invited state lawmakers in its opinion to clarify no-fault insurance rules.
That being said, some courts have in fact interpreted the decision as preventing recoveries of medical bills over $15,000 – which can place the ability of victims to recover unpaid medical bills in serious doubt, depending on the presiding judge and county.
One of the most important lessons that can be learned from this ruling is one of practicality and preventative caution: Make sure you’re adequately covered. It can make the difference when it matters most.
Though higher premiums can be tough, being “under-covered” can pose significant financial risks, especially following serious and costly injuries. The state’s default $250K PIP coverage exists because medical bills can be immensely expensive. Though every injury and course of treatment is different, $15,000 can be quickly exhausted, sometimes before a victim even leaves the ER. Catastrophic injuries, the need for major procedures, and long recoveries only add to the growing stack of medical bills.
For this reason, we strongly encourage New Jersey motorists to carefully evaluate their auto insurance policies. Though the standard $250K is preferable, at least $50K in PIP coverage is recommended in order to avoid not only being injured should you become a victim of a car accident, but financially ruined as well. When evaluating PIP coverage, it may also be a wise decision to look at your options for UM / UIM coverage, which can help in the event you’re injured by an uninsured or underinsured driver.
Levinson Axelrod, P.A. has been fighting for injured victims and families across New Jersey since 1939, and have extensive experience handling motor vehicle accident cases and insurance-related matters. If you have questions about your rights and options following an auto accident, call (732) 440-3089 or contact us online to speak with an attorney.