By Francis M. Smith
A car accident can result in serious injuries to the drivers, passengers, or pedestrians involved in a crash, and these injuries often require expensive medical treatment. When you have suffered such injuries, it's vital for you to understand who is responsible for these bills and how they are paid – knowing your rights and understanding the benefits to which you are legally entitled can help you avoid the sort of financial hardship that might complicate (or prevent) your recovery from your injuries.
Any person injured in a car accident with a private motor vehicle is entitled under New Jersey law to Personal Injury Protection, or PIP, benefits. These benefits are paid by:
- Your car insurance company, if you hold a car insurance policy
- Or by the insurance policy of a relative with whom you reside if you do not own a vehicle and have no car insurance of your own
- Or the car in which the injury was sustained, if the first two options don't apply to you
Non-drivers who do not have a resident relative with car insurance and are injured in a car accident, likely as a pedestrian or cyclist, may apply to a fund known as the New Jersey Property Liability Insurance Guaranty Association (NJPLIGA) to cover their medical bills, but there are strict eligibility requirements for NJPLIGA.
The sum of the PIP benefits to which you are entitled following a car accident is determined by a combination of your insurance policy and New Jersey state law. PIP benefits do not only encompass medical expenses, but also include income continuation and essential services benefits, as well as death and funeral benefits. The portion of the benefit package which covers medical bills is rather complex. All reasonable treatment expenses are covered, including hospital in- and out-patient care; treatment by doctors, dentists, chiropractors, therapists, and psychologists; ambulance or other medical transportation; diagnostic tests and scans including x-rays, CAT scans, and MRIs; trained nursing care, prescription coverage, and medical appliances. However, there are limits and deductibles that apply to the total cost of the care that PIP benefits will provide.
There is always a minimum deductible of $250 toward the cost of your medical treatment for which you, as the patient, are responsible. Depending on the coverage options you selected on your car insurance policy, you may have a higher deductible in exchange for lower insurance premiums; this deductible can be no higher than $2,500. The coverage provisions that apply to your case are those reflected in your insurance policy on the date of your car accident. Keep in mind: even if you make changes to your policy prior to receiving any medical care or incurring medical expenses relating to your accident, these modifications will not apply to the medical benefits you receive as a result of the accident.
After the deductible is subtracted, you are still responsible for a 20 percent co-payment on all medical care with costs, up to $5000. The PIP benefits paid by your insurance company will cover the remaining 80 percent, up to $4000. After the first $5000, the provider of your PIP benefits is responsible for 100 percent of all medical expenses up to the limit of your insurance coverage; the usual maximum for benefit eligibility is $250,000, but you can buy insurance policies that offer as much as $1 million as a coverage maximum. There are other policies offered with a low limit of $15,000 in PIP, meaning the auto insurance carrier has to pay no more than that - which can be reached very fast indeed if you are really injured. I advise you NEVER consider such low limits. One client with $15,000 in PIP coverage later found out that he could have had the full $250,000 in coverage - an additional $235,000 in coverage - for all of $60. Think of that for a moment. That's less than 17 cents a day. The insurance company does not want you to know the cost this insurance, they would much prefer you buy low limit so they have very little exposure to pay your medical bills. The cost of the medical services and care you receive is subject to a fee schedule managed by the New Jersey Department of Insurance; if you are billed at a higher rate for the medical care you receive than would be indicated by this fee schedule, you are not held responsible for those additional charges.
It is reasonable to expect that your insurance company will pay all medical bills relating to the injuries you sustained in your car accident, as this is what is mandated under state law. However, insurers have an interest in paying as little as possible on PIP benefit claims. Under New Jersey Law, insurers may choose to have a patient receiving medical benefits examined by a doctor they choose to determine whether or not continued medical care is necessary for the patient's injuries. The doctors they select are paid by the insurance company for this examination, who often make a substantial portion of their income by performing these insurance examinations. These doctors have an incentive to supply a conclusion that meets with the insurance company's approval. This doctor may determine that your injuries:
- Have been completely healed by the treatment that you have already received,
- Or that you have reached the maximum potential of your medical improvement for more obvious and severe injuries
If you receive such a diagnosis, your insurer will attempt to terminate your PIP benefits. However, this decision is not final; with the help of a treating physician and an a qualified personal injury lawyer, you can fight for your continued benefits and continue receiving the care you need and deserve.