No Fault Auto Insurance in New Jersey…the details…

Rising auto insurance costs in New Jersey in the early 1970s caused the New Jersey Legislature to pass and enact no-fault insurance laws.

Under the new law, auto insurance was made mandatory for all motor vehicles in New Jersey. Each person must have $15,000 of minimum liability coverage. This amount has not been increased since 1972, despite inflation. To gain perspective, the cost of a typical home in the US in 1972 was $30,000, including the land the home was on.

The no-fault insurance system instituted in 1972 was very different from the current system in New Jersey. The earlier system of no-fault insurance offered unrestricted medical treatments and unlimited coverage no matter who caused the accident. Other benefits included income continuation, funds for funeral services and other expenses, as needed. The injured person could file a lawsuit or claim if their medical expenses exceeded $200.

The benefits that the car accident victim received were referred to as PIP benefits, or personal injury protection. In exchange for receiving PIP benefits, no lawsuit could be filed for medical costs and basic wages that were paid by PIP. A personal injury lawsuit only could be filed for pain and suffering and unreimbursed lost wages.

The system has been changed several times over the years. Today’s system in New Jersey is regarded as expensive, ineffective and burdensome. The cost savings have never really come into being, and experts say that the system is even more inefficient today than years ago.

What Does PIP Cover?

PIP generally pays for a variety of auto accident costs and expenses, up to your coverage limits. Coverage under PIP typically includes:

  • Medical expenses: Eligible expenses include treatment, rehabilitation, diagnostic services and other medically necessary expenses
  • Lost wages: If you cannot work due to your accident injuries. Benefits for lost wages are limited to $100 per week and $5200 per person, per accident.
  • Essential service benefits: This refers to services or work that could have been done by the injury victim if that incident had not happened. There is a cap of $12 per day and $4380 per incident.
  • Death benefits: This can be paid in a lump sum, and can be up to $5200 for lost income, and $4380 for lost services.
  • Funeral expenses: This can be up to $1000 to pay for burial, cremation and related costs.

PIP is offered by your own auto insurance company. You should file a claim with your insurance company as soon as the accident happens. An experienced New Jersey attorney can help you to inform your insurance company, prove that you are eligible, prove your losses, and recover as much as possible under the terms of your insurance.

Contact Us for a No-Obligation Consultation

If you have been injured in a car accident by another person or entity, you will benefit from consulting with an experienced personal injury lawyer in New Jersey. The no-fault insurance laws of New Jersey are notoriously complex. To ensure that you receive the maximum possible settlement, you should talk to one of our attorneys today. You will not need to pay anything up front; our attorneys are paid a contingency fee as a percentage of the settlement. Please contact us today so that we can review your car accident claim (201) 944-9200.

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