Being a "no-fault" state means that in New Jersey, your own auto policy's Personal Injury Protection (PIP) pays your medical expenses after a car accident, no matter who caused it. It doesn't mean nobody is at fault. Fault still matters for damage to cars, for liability claims and for lawsuits over pain and suffering.
I'm Anthony Abbatiello, and I've been helping drivers in Manchester Township, Whiting and the rest of Ocean County with their car insurance for more than 15 years. "No-fault" is one of the most misunderstood terms I hear, so let's break it down in plain English.
What PIP is and what it pays
The New Jersey Department of Banking and Insurance (DOBI) Auto Insurance Buyer's Guide describes PIP as your medical coverage for injuries you and others covered under your policy suffer in an auto accident. DOBI says it's sometimes called "no-fault" coverage because it pays your own medical expenses no matter who caused the accident.
According to DOBI, PIP has two parts.
- Coverage for treatment from hospitals, doctors and other medical providers, plus medical equipment needed to treat your injuries.
- Reimbursement for certain other expenses because you're hurt, like lost wages or needing to hire someone to help take care of your home or family.
The idea is to get injured people care quickly, without waiting for the insurance companies to sort out who was to blame.
What no-fault does not mean
Here's where people get tripped up. No-fault applies to your injury coverage. It doesn't mean.
- Fault doesn't matter. Who caused the accident still affects liability claims, property damage and, in many cases, your driving record.
- Your car repairs are automatically covered. Damage to your own vehicle is generally handled under collision coverage, which is optional in New Jersey, or through the other driver's property damage liability if they caused it.
- You can never sue. That depends on the lawsuit option you choose, which I'll explain next.
The lawsuit option: limited vs. unlimited right to sue
DOBI explains that on the Standard Policy, you have to choose what rights you'll have to sue another driver for pain and suffering if you're hurt. The Basic Policy includes the limited right to sue.
Limitation on Lawsuit Option (limited right to sue). You agree not to sue the person who caused the accident for pain and suffering unless you sustain one of the serious injuries listed in the law. DOBI's guide lists them as loss of a body part, significant disfigurement or scarring, a displaced fracture, loss of a fetus, a permanent injury as defined in the guide, or death.
No Limitation on Lawsuit Option (unlimited right to sue). You keep the right to sue the at-fault driver for pain and suffering for any injury.
Two important points from DOBI. First, this choice only affects lawsuits for pain and suffering, also called non-economic losses. Your medical expenses and some economic losses are paid up to your PIP limits either way, and the limited option doesn't affect your ability to sue for economic damages like medical bills and lost wages. Second, your choice applies to you, your spouse, and relatives living with you who aren't covered under another auto policy.
DOBI also notes that the choice you make affects both what your insurance costs and what claims will be paid. I can't tell you which option is right for you, and this isn't legal advice. If you have questions about your legal rights, an attorney is the right person to ask. What I can do is make sure you understand the trade-off and that the selection on your coverage form reflects what you meant to choose.
PIP choices worth reviewing
DOBI's guide describes a few PIP decisions you make.
- Your PIP deductible. A higher deductible means more out of pocket if you're hurt.
- Health Care Primary. You can choose to use your own health insurance as the primary source of coverage for auto accident injuries. DOBI says to check first whether your health plan covers auto accident injuries and how much. Medicare and Medicaid can't be used for this option.
- Extra PIP package options, which are additional benefits available on the Standard Policy.
Whether any of these fit depends on your health coverage, your family and your budget.
FAQ
Does no-fault mean my insurance pays no matter what?
It means your own PIP pays covered medical expenses regardless of who caused the accident, subject to your policy's limits, deductible and terms. Fault still matters for other parts of a claim.
Can I sue the other driver in New Jersey?
It depends on your lawsuit option. With the limited right to sue, a pain-and-suffering lawsuit is generally restricted to the serious injuries listed by law. For questions about your specific rights, talk to an attorney.
Does my lawsuit choice cover my family?
DOBI says it applies to you, your spouse and relatives in your household who aren't covered under another auto policy.
Where can I read more?
NJ DOBI's Auto Insurance Buyer's Guide and its Standard Policy coverage page are good places to start.
Let's take a look together
If you're not sure which lawsuit option or PIP choices are on your policy, I'm happy to pull it up with you. Call me at 732-504-0301, text 732-914-1212, or stop by the office at 1980 Rt 37 W, Suite 7, in Manchester. Walk-ins are welcome.
Anthony Abbatiello, Agent for Allstate, Abbatiello Financial Group. Licensed in NJ and PA.
Coverage is subject to policy terms, conditions and availability. Not all discounts apply in every state.
Photo: Negative Space via Pexels
