Guide · Insurance & PIP
PIP in Plain English: What Your New Jersey Auto Policy Actually Pays For
The short answer
PIP, or Personal Injury Protection, is the part of your New Jersey auto policy that pays your medical bills after a crash regardless of who caused it. Every New Jersey auto policy has it. Coverage ranges from $15,000 to $250,000 depending on what you selected, and most people have no idea which they chose.
Start here: it pays even if the crash was your fault
New Jersey is a no-fault state for medical bills. That phrase confuses everyone, so here is what it actually means:
Your own insurance company pays your medical treatment after a crash, and it does not matter who caused it. You do not wait for fault to be sorted out. You do not wait for a lawsuit. You get treated, and your PIP pays.
That is the entire point of the system, and it is the single most useful thing you can know in the first week.
How much do you actually have?
Here is where people get hurt, and it happens years before the crash, at the moment they bought the policy.
A New Jersey Standard Policy comes with $250,000 in PIP medical expense coverage by default. But you were allowed to lower it, in exchange for a smaller premium:
A Basic Policy carries $15,000. Read that number again, and then think about what a single ambulance ride, an ER visit, an MRI, and a course of physical therapy costs. Fifteen thousand dollars can be gone before you leave the hospital.
There is one important exception built into the law: even at the lower limits, up to $250,000 is available for medically necessary treatment of permanent or significant brain injury, spinal cord injury, or disfigurement, and for other permanent or significant injuries treated at a trauma center immediately after the crash.
Go look at your declarations page right now. It is the one-page summary your insurer mails you every renewal. The PIP number is on it. Most people have never read it.
The deductible and the copay
PIP is not free money. Before it starts paying:
- A deductible. The default is $250. You were allowed to raise it, to $500, $1,000, $2,000, or $2,500, in exchange for a lower premium.
- Then a 20% copay on the next $5,000 of medical expenses.
- After that, PIP pays the rest, up to your limit.
So on a standard policy with the default deductible, your realistic out of pocket before PIP takes over is somewhere in the neighborhood of $1,250. Worth knowing before the bills start arriving.
The checkbox that costs people the most: “health insurance primary”
Buried in your policy is an election called health insurance primary. Choosing it means your health insurance pays first and PIP steps back, and it saves you a modest amount on your premium.
It is also, for most people, a bad trade, and here is the part nobody explains:
Your PIP carrier does not come after your settlement to get its money back. Your health insurer generally does.
That is a lien. It comes off the top of whatever you eventually recover. So the premium you saved on the front end gets clawed back out of your settlement on the back end, often many times over.
PIP pays for more than doctors
Most people never claim these, because nobody tells them the benefits exist:
- Income continuation. If you cannot work, PIP may replace part of your lost wages. On a standard policy this is often up to $100 per week, capped at $5,200, and higher limits can be purchased.
- Essential services. If you cannot do the things you normally do around the house, like cleaning, cooking, or childcare, PIP may reimburse the cost of paying someone else to do them.
- Funeral and survivor benefits.
Why your PIP claim gets denied
PIP denials are routine and they are not always correct. The usual reasons:
- Precertification. Many treatments require the insurer’s approval in advance. Miss the step and they deny the bill, even when the treatment was obviously necessary. Emergency care in the days immediately after the crash is generally exempt.
- “Not medically necessary.” The insurer’s reviewer, who has never seen you, disagrees with your treating doctor.
- “Unrelated to the accident.” They found a prior injury in your records and pinned it on that instead.
- Paperwork. A form was late or a box was blank.
A PIP denial is not the end of the road. There is an appeal process, and there is arbitration. If a denial letter arrives, do not just stop treating. Call somebody.
This is the call Dominick’s clients keep telling people about.
Not the settlement. The part where somebody finally sat down and explained how their own insurance worked. That call is free, and it is free whether or not you ever hire him.
Call (201) 719-1669Common questions
Does PIP pay if the accident was my fault?
Yes. That is the whole point of no-fault. Your PIP pays your medical bills regardless of who caused the crash.
Will my rates go up if I use my PIP?
New Jersey law restricts surcharging for a not-at-fault accident. Do not let this fear keep you from getting treated. Untreated injuries get worse, and untreated injuries also destroy cases.
How much PIP do I have?
Look at your declarations page. It ranges from $15,000 to $250,000 depending on what you elected.
Does PIP cover my passengers?
Generally yes, and it can cover pedestrians you strike as well.
Does PIP cover motorcycles?
Usually not the same way. Motorcycle policies are structured differently and the medical coverage is often much thinner or absent entirely. If you ride, find out now, not later.
My PIP ran out and I still need treatment. Now what?
This happens, especially on lower limits, and it is one of the strongest reasons to have a lawyer. There are other places the treatment can be routed, and there is a claim to be made against the at-fault driver.
Written and reviewed by Dominick Succardi
Personal injury attorney, admitted in New Jersey since 2014. About Dominick →