New Jersey No Fault - Who Pays the Medical Bills Following a Motor Vehicle Accident?

One of the most confusing aspects of a motor vehicle accident can be determining who pays the medical bills. Many people are surprised to learn that it is not the at-fault party's insurance. This article will, very briefly, outline the basics of New Jersey No-Fault laws.

Most people believe that the insurance company of whoever caused the accident should pay the medical bills of whoever is injured. While that would seem to make sense in terms of fairness, and that is how it used to be 40 years ago, that is not how it works in New Jersey. No-Fault means that medical bills will be paid regardless of fault, under a first party system. The reason No-Fault came about was, in part due to the pressure of doctors and hospitals who did not want to wait for a determination of who caused an accident in order to get paid. Under the current No-Fault system, the medical pills get paid quickly because fault doesn't matter, and that allows injured parties to receive prompt medical care. At least that's the theory.

All personal car insurance polices issued in New Jersey must contain No-Fault coverage which is called Personal Injury Protection (or PIP). The usual coverage is for $250,000 per accident. However, purchasers of insurance are offered cheaper premiums for reducing their coverage. There are certain types of policies which are exceptions, see section below.

Steps to Determine Which Insurance Company Pays the Medical Bills
This series of questions is to be directed to the injured party in any scenario involving an injury due to a motor vehicle.

1. Workers' Compensation
Did your injury occur during your employment, such as making a delivery, running an errand for the boss, taking a company vehicle for repair, a police officer in squad car accident, etc? If you were "on the job" then Workers' Compensation actually comes before No-Fault and is primarily responsible for medical bills. You will have to go to the authorized medical providers designated by the Workers Compensation insurance company or your employer. In some instances, PIP benefits may also be available from your own personal auto insurance, a household member's insurance, or the work vehicle you were occupying when the accident occurred. Because these issues can be very complicated, if your injury occurred during a work-related vehicle accident, you should consult a qualified attorney for more specific guidance. If your accident did not occur while working, then proceed to #2.

2. Do you own a motor vehicle?
"Owning" a vehicle means it is registered in your name with the DMV. If someone else is the registered owner, even if you drive it every day, you do not "own" it.

If yes, your own car insurance will pay your medical bills related to any accident involving a motor vehicle. So, even if you were in someone else's car or if you were a pedestrian hit be a car or bus, your own car insurance will pay your bills. You should know that if the accident is determined not to have been your fault, your insurance company may be able to recover any amounts paid for your medical bills from the at-fault insurance company. This happens later at an inter-company arbitration with which you will have no involvement.

If you own a vehicle but it is uninsured there will be no insurance to cover your medical bills, even if you were in someone else's car or a pedestrian hit by a car. New Jersey takes the mandatory insurance laws seriously and if you have an uninsured vehicle you don't get any benefits. An exception is for an inoperable vehicle such as a junker up on blocks. If you own a car that doesn't run and it is not insured, you may still be able to obtain PIP coverage from one of the below sources.

3. If you do not own a vehicle, do you live with any relatives who own a vehicle?
This is where people usually go nuts. "What does my father's insurance have to do with this accident?" "I was in my friend's car". "My brother doesn't want his insurance involved". Unfortunately this is the usual response when it gets to this step. But, if you do not own a car the next place to look for PIP coverage is any family member living with you who owns a car. This can be a parent, child, brother, sister, aunt, uncle, grandparent, etc. It does not include a boyfriend/girlfriend or roommate, there must be some family relationship, although blood relation is not necessary. (step-father, step-brother can be covered)

4. If you do not own a vehicle, and no family member owns a vehicle, the next step for PIP coverage is the vehicle you were in when the accident happened.
If your accident occurred while you were a driver or a passenger in someone else's car, (and you do not own a car, and you do not have any family member living with you who owned a car), then the insurance of the vehicle you were in (called the "host vehicle") will be responsible for your No-Fault coverage.

You are in your boyfriend's car, stopped at a red light, and rear-ended by another car. You don't own a car and you don't live with any family member. Your boyfriend's car insurance will pay your medical bills. (You must report the accident and request an application for benefits which an experienced attorney can help you with,. Your boyfriend's insurance rates can not be increased unless the accident was his fault.

4. Pedestrian hit by car
If you were a pedestrian hit by a car, the first three steps are the ones above. If you own a car, your insurance pays your bills. If you don't have a car, does any family member that you live with? If not, there is a special remedy for you. The State of New Jersey maintains a special fund called the New Jersey Property Liability Guaranty Association ("NJPLIGA"). If you are a pedestrian hit by a motor vehicle and you have no insurance in your household, the NJPLIGA is responsible for your bills. It is recommended you consult an experienced attorney to help process the application. Also, if you are a pedestrian hit by a car that flees the scene, the same analysis applies. If you have no car in your household the NJPLIGA would be responsible for your medical bills.

5. Passenger in uninsured car
If you were in an accident while a passenger in vehicle that turned out to be uninsured because the insurance was never obtained or was canceled before the accident date, then the same steps above apply. If you owned a car your own insurance pays your bills. If you didn't we look to any resident family member for car insurance. If there is no car insurance in the household, and the host vehicle is uninsured, then you too can apply to the NJPLIGA and they will have to pay your cover bills.

6. Passenger in a motor vehicle that is not a car
Not all motor vehicles are required to carry no-fault insurance. Only vehicles that meet the definition of "automobile" carry PIP coverage. Taxis, commercial trucks, some commuter buses, and New Jersey Transit buses are some examples of vehicles which don't carry PIP coverage. If you are injured while a passenger in one of these types of vehicles, the inquiry is a little different. First, if you were working, you will be covered by workers' compensation. If not, then we again look to your own policy, if you have one, or then a household family member's policy. PIP does not apply, but your own policy should have coverage for "extended medical benefits" which applies in non-automobile situations. Be advised that this coverage is limited and is sometimes only $10,000 or just $1,000. An experienced attorney can obtain the insurance policy and verify the coverage.

7. "Basic" or "Special" Policies
The standard insurance policy contains $250,000 of PIP coverage. However, you have the right to reduce this amount when you buy your insurance. There are limited policies called "Basic" policies which only provide $15,000 of PIP coverage. Also there are "Special" policies, available only to low-income persons qualified to receive Medicaid. Special policies, also called "Dollar-a-Day" policies, provide PIP only for emergency care and they provide no coverage for continued medical care, therapy or treatment after the emergency phase unless there is a significant brain injury or catastrophic injury.

8. Motorcycle
Injuries occurring while you were on a motorcycle are typically not covered by PIP. Motorcycle insurance usually does not include PIP. You should check with your motorcycle insurer to see if you have PIP. Car insurance does not cover you for PIP when you are on a motorcycle because it is generally an excluded act. You will most likely have to submit your bills to your health insurance or the bills can be part of your damages claim against the at-fault driver.

9. Health Insurance Primary policies
Some car insurance companies offer policies in which you designate that your health insurance will be primary. You will get a reduced premium. In practice, the health insurance usually denies the bills because they see it is a car accident and assume that your no-fault should be paying. The medical providers, even if health insurance is primary, must submit to the car insurance for pre-certification of all treatments, and this almost never happens. We do not recommend the health insurance primary option to anyone. But there are many policies out there with this restriction.

A Final Note
This article can only scratch the surface of the New Jersey No-Fault laws, and is intended only as a general guide. Nothing contained herein should be construed as legal advice. The specifics of every case is different. At every point issues can arise which will require experienced legal advise to decipher. For example, where someone actually "lives" is often debatable. Who "lives" with you is not always clear. Permanent addresses, mailing addresses, temporary addresses, can vary. One thing that is certain, the insurance companies will look for a reason to deny benefits. If you were injured in a New Jersey accident, you should consult with an experienced lawyer to determine the proper insurance company to submit your No-Fault/PIP claim.

The Jersey City personal injury law firm of Krivitzky, Springer & Feldman has represented New Jersey accident victims since 1976. Each of our attorneys has over 18 years experience helping those who have suffered injury or loss through another's negligence. Our experienced personal injury and worker's compensation lawyers apply over 95 years of combined experience in a wide range of personal injury cases, such as car accidents and other motor vehicle accidents (MVAs), slip, trip and fall-down accidents, work-related injuries, conditions or exposures, medical malpractice, wrongful death, dog bites or attacks, and other injuries.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

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