Auto Accident FAQs
Who pays my medical bills if I am injured in an automobile accident?
Since 1972 New Jersey has a No-Fault auto insurance system. This means that no matter whose fault the accident was, you own personal automobile insurance policy will pay for your medical bill. In most cases, there is a $250 deductible and a 20% co-payment on the first $250,000 of medical bills. These medical bills are part of your PIP benefits. The deductibles and co-payments not paid by PIP can be sent to your other health insurance carrier.
What is “PIP?”
“PIP” is an abbreviation for Personal Injury Protection. It is the PIP coverage for your personal automobile insurance that pays for your own medical bills. It also provides income continuation coverage should you be out of work, essential home services for home related expenses, and limited funeral expense coverage.
What is liability coverage?
Liability coverage is that portion of your automobile insurance that protects your personal assets in the event that you are sued as a result of an automobile accident. Most people should have enough insurance to protect the total value of their assets, including their home equity and future earnings. In New Jersey, the minimum coverage is $15,000. We recommend against maintaining the minimum coverage for many legal reasons, primarily because it will limit the amount of underinsured and uninsured motorist coverage you can claim.
What are uninsured motorist and underinsured motorist coverage – UM/UIM?
Uninsured Motorist coverage, or commonly known as UM coverage, causes your insurance company to pay your claim for damages if the other driver is uninsured. Underinsured Motorist Coverage or UIM coverage provides insurance to you and your household members in the event that another driver causes an accident that injures you, and that driver does not have enough insurance to adequately compensate you for your injury. If your UIM is more than the defendant’s insurance, your company will provide the additional dollar amount of coverage since UIM coverage only applies when your limits of UIM coverage exceed the liability limits of the motorist who caused the accident.
What is the Limitation on Lawsuit threshold?
When purchasing auto insurance in New Jersey you have a choice of Lawsuit Threshold or Zero Threshold. Lawsuit Threshold restricts your right to sue for non-economic loss, such as pain and suffering unless you prove that your injury fits within one of six categories of injury: (1) death; (2) dismemberment; (3) significant disfigurement or scarring; (4) a displaced fracture; (5) loss of a fetus; or (6) “Permanent Injury” which is defined to mean that the body organ or part has not healed to normal function and will not heal to normal function with further medical care. A certification by a doctor as to permanency is required. It is important to note that if the accident happened with a commercial vehicle, then your threshold no longer matters; you will automatically be entitled to sue for your injuries.
What is the Zero Threshold or No Limitation on Lawsuit Threshold?
This choice fully preserves all of your rights to sue. You will not be subjected to the limitations of a Threshold. An additional premium is charged. The threshold does not apply if your accident involved a truck or commercial vehicle.
What is a “basic” insurance policy?
This type of insurance allows you to own an operate a car in New Jersey and not be charged with driving uninsured, but the reality is that you are virtually uninsured. This type of policy provides no liability insurance. If you are sued as a result of an automobile accident, your insurance company will not provide a lawyer for you and it will not pay any resulting judgment. Our legal advice is clear: Never buy a basic policy!