One of the most critical insurance coverages to have in New Jersey is known as Personal Injury Protection (aka “PIP”). PIP, more commonly known as No-Fault insurance is the medical expense portion of the auto policy which covers personal injuries suffered as a result of automobile accidents.
The most common coverage that people tend to obtain is a $250,000 limit for these purposes. Insurance companies will often try to entice customers to obtain a coverage that has a smaller limit to pay less in the event someone sustains an injury. However, this is one component of the auto policy which should be not overlooked.
When structuring multiple policies, it is important to make the auto-insurance policy primarily responsible for these claims and the health insurance secondary. There are two important reasons for doing this. First, PIP unlike health insurance prevents doctors from billing the difference between what the insurance policy pays to medical providers under a billing schedule and the amount the provider charges.
However, under health insurance, the doctors can issue a medical bill accounting for the difference which you may be liable for. The second reason is that PIP does not have to be reimbursed. For example, if PIP pays the full $250,000 for your injuries and you subsequently settle a case against the responsible party for another $250,000, you do not have to pay back the money to the insurance company.
Other types of insurance outside of PIP may sometimes have a provision that requires reimbursement for the money that is paid out. For serious cases, these instances can be very costly.
As a practical matter, there are a lot of doctors who will accept PIP. However, New Jersey does not require that doctors accept PIP or Medicare, for example. One reason that doctors may not want to accept PIP is because they do not want to be locked into a medical billing schedule by the insurance companies which provide for specific dollars amounts per service or medical supply provided. Nevertheless, there are still a good number of doctors who do accept PIP.
It should be noted that in instances where you are in emergent care, doctors have the responsibility to save your life and otherwise sustain your condition. PIP only applies for treatment that may be needed after the fact. For example, if you need additional therapy or other treatments after a doctor stabilizes you.
