Consumers are always trained to look for the best deal. However, when it comes to automobile insurance, sometimes saving a few dollars upfront may mean getting saddled with thousands of dollars in the future if you are involved in an automobile accident— even if the accident is the result of someone else’s negligence. 

Recently, an article was published in a local New Jersey newspaper regarding an auto accident victim who sustained bilateral fractures to both legs and ankles, injuries to her cervical spine, and a punctured lung as a result of a head on collision caused by a drunk driver. After spending three weeks in the hospital, she was then transferred to an assisted living facility and has been living there since the accident, as she is unable to care for herself. Unfortunately, the medical bills have been piling up, and because this driver selected Health Insurance Primary as part of her automobile insurance policy, she is now caught in the middle of an insurance dispute between her health insurance carrier and her automobile insurance carrier.

In New Jersey, your own automobile insurance carrier pays for your medical bills if you are injured in an automobile accident. It is typically referred to as No-Fault, or Personal Injury Protection (PIP) benefits. Prior to the passage of the Automobile Insurance Cost Reduction Act (AICRA) in 1998, standard PIP coverage provided a mandatory minimum limit of $250,000 in medical expense benefit coverage. However, since passage of the act, New Jersey insurers are now permitted to offer less coverage to consumers.

I have had many clients tell me that their insurance carrier or broker actually encouraged them to select Health Insurance Primary as they had “good health coverage.” In reality, the minimal savings they might have had up front were greatly outweighed by the thousands of dollars of medical bills they incurred when they sustained a catastrophic injury in an automobile crash. Even worse, some health insurance carriers are entitled to assert a lien against an injured victim’s settlement which means that before the victim receives any of the settlement funds, the lien must be repaid first. Therefore, if you are hit and suffer injuries by a tortfeasor who has limited insurance coverage, most of the settlement might go to repay the health insurance carrier before you can even be compensated for your pain and suffering. I recommend to all of my clients that they select at least $250,000 in PIP coverage as part of their automobile policy.