Not all states handle car insurance the same way. New Jersey is a no-fault car insurance state, which means drivers turn to their own insurance for medical coverage after a car accident, regardless of fault. While fault can still matter in certain situations such as lawsuits or how damages are claimed, no-fault rules help determine how injury related expenses are paid. Learning the basics of no-fault car insurance can help you better understand your coverage and make informed insurance decisions.
Medical coverage / Personal Injury Protection (PIP)
According to no-fault laws in New Jersey, medical coverage for injuries resulting from car accidents is provided by your own insurance company – regardless of who is at fault for the accident. This may apply even if you are injured as a passenger in another person’s vehicle.
Medical coverage on your car insurance policy is provided through Personal Injury Protection (PIP). Sometimes known as no-fault coverage, PIP covers the cost of your treatment and any medical equipment. PIP can provide reimbursement for expenses related to an injury sustained in a car accident, including income continuation or essential services.
Can I use my health insurance instead of PIP in New Jersey?
In New Jersey, drivers can choose to have their health insurance pay for injuries related to a car accident first instead of PIP. However, if you have health insurance (excluding New Jersey Family Care Plans (provided by Aetna Better Health, Wellpoint, Horizon NJ Health, UnitedHealthcare Community Plan or WellCare, Medicare or Medicaid), you may be eligible to select Health Care Primary for your PIP coverage. Because this option designates your health insurance carrier as your primary source of medical coverage for injuries resulting from a car accident, you can save up to 25% on your PIP premium for each insured vehicle on your policy.
What’s the difference between PIP and Bodily Injury (BI)?
PIP provides coverage for payment of your medical bills (and some other medical-related expenses) that you incur as the result of an auto-related injury. PIP not only covers medical expenses but may also cover many non-medical related benefits like lost wages, funeral costs, substitute services, and more. Bodily Injury (BI) pays for other people’s injuries if you caused the accident. Essentially, BI protects you against claims from others — it does not pay your own medical bills.
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Common questions about car insurance
No-fault insurance is included as part of standard auto insurance policies through Personal Injury Protection (PIP) in New Jersey. PIP coverage is required under New Jersey state law, and helps pay medical expenses after a car accident regardless of fault.
Passengers injured in a car accident may be covered by no-fault insurance, typically through their own policy or the policy covering the vehicle they were in. Coverage for pedestrians can vary depending on the circumstances and available insurance policies.
No. Liability insurance protects other people, meaning damage/injury you cause to others, while no-fault insurance covers your own medical expenses regardless of who is found to be at fault in a car accident.
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