N ew Jersey is one of a few states that require all drivers to carry a minimum limit of personal injury protection, or PIP. PIP is a coverage drivers carry to ensure their medical expenses are covered in the event of an accident, regardless of who’s at fault.
New Jersey is one of 13 states with no-fault laws, where drivers must carry a first-party medical benefit (FPMB) as a stipulation of the law. FPMBs such as PIP cover the policyholder’s expenses, so they don’t need to rely on another driver in the event of an accident. Let’s find out how PIP works on a New Jersey auto insurance policy , what it covers, and the subtle nuances of the coverage.
All drivers are required to maintain a minimum amount of auto insurance in New Jersey, which includes a minimum limit of PIP coverage. PIP is a coverage type that the policyholder uses on their own expenses and is often required in a no-fault state such as the Garden State . Policyholders have direct access to the funds provided by their PIP coverage, which they can use to cover any medical expenses they incur in an accident, regardless of who was at fault.
To cover the expenses incurred in an accident, New Jerseyans will default to their PIP coverage first, then look to the at-fault driver to cover the remaining costs. If the policyholder caused the accident, they will either have to rely on the other coverages on their policy that cover their own expenses or pay for the remainder of the bill out of pocket.
Drivers can use their PIP coverage for any medical expenses they incur up to their coverage limit and only once they pay their deductible . All drivers in the Garden State must have at least $15,000 in PIP, but drivers can opt for over $250,000 in coverage.
In New Jersey, PIP is required on all auto insurance policies, with a minimum limit of at least $15,000 of coverage for every driver. This coverage gives drivers access to a vast range of coverage for all types of medical expenses, including standard costs like ambulance rides or hospital stays, ranging all the way to work loss or childcare expenses. This coverage will protect the policyholder and typically protects any uninsured passengers in their vehicle, like children or other adults who don’t have auto insurance policies.
When a policyholder is injured in an accident, they’ll first invoke their PIP coverage to begin paying off their medical expenses or debts. Once they’ve maxed out their PIP coverage limit, they’ll either rely on any other first-party coverages on their policy, like medical payments coverage (MedPay), or they’ll rely on the at-fault driver’s liability coverage.
If the policyholder is at fault in an accident and doesn’t have any other first-party coverage besides the minimum limit of PIP, they’ll have to find another way to cover their medical expenses . If the policyholder was the victim in the accident, they’d rely on the at-fault driver’s liability coverage to cover the remainder of their expenses. If the driver that caused the accident is uninsured or underinsured, the victim will rely on their uninsured or underinsured motorist coverage (UM/UIM) .
Drivers in tort states , sometimes called at-fault states, rely on each other’s liability coverage in the event of an accident. Waiting for fault to be assigned in an accident can make the process of receiving insurance coverage inefficient. States generally adopt no-fault laws because they lack the bandwidth in the insurance and legal systems to assign fault to each accident before drivers can receive their insurance benefits.
Drivers must have at least $15,000 in New Jersey pip coverage on their policies, no matter what type of policy they carry. Since the Garden State is a no-fault state, all drivers must carry the no-fault coverage on their policies.
New Jersey auto insurance policies differ from those in other states in that there isn’t one set standard for a minimum coverage policy. Instead, New Jerseyans can carry either a basic or standard policy, each of which has different minimum coverage requirements.
Insurance laws in the state require drivers with a basic policy to have at least $10,000 in bodily injury liability per accident, $5,000 in property damage liability per accident, and $15,000 in PIP per accident. Those with a standard policy must have at least $25,000 in bodily injury liability per person, $50,000 in bodily injury liability per accident, $25,000 in property damage liability per accident (25/50/25 liability coverage), the same 25/50/25 limit for UM/UIM coverage, and $15,000 in PIP coverage. Those who finance or lease their vehicles may also be required to have collision and comprehensive coverages on their policies.
Driving without insurance in the Garden State is illegal . Those who fail to comply with the mandatory insurance minimums in the state may face severe penalties such as fines, license or registration suspension, vehicle impoundment, or even jail time. While those caught driving without sufficient coverage in the state don’t risk filing for SR-22 insurance , they may require specialized, high-risk insurance in the future as insurers are hesitant to insure drivers who disregard mandatory insurance minimums.