In a previous blog post, I discussed Personal Injury Protection benefits.  In 1990, the New Jersey legislature amended what is known as the “no fault law” and gave insureds the option to designate either their automobile insurance carriers or their health insurance carriers as the primary source for Personal Injury Protection benefits.  Why would someone choose this option?  When the law was amended, those electing to have their health insurers as primary carriers were guaranteed a 25% reduction in the premium applicable to the first $250,000 in PIP coverage.  In layman’s terms, if an insured chooses his health insurance carrier has the primary source for PIP benefits, his insurance policy premium can cost less money.  

Insurance Department regulations provide that an insured can choose to have virtually any other health insurance provider cover PIP benefits, including federal or state programs, but not Medicare or Medicaid.  It is worth noting, though, that an uninsured employee benefit health plan controlled by ERISA is not subject to a statutory provision prohibiting restrictions on health coverage arising from an automobile accident.  

It also must be noted that the law mandates that to avoid coverage disputes, insureds and prospective insureds must provide written information identifying the health insurer providing primary PIP medical expense benefits.  

Now, what happens if you selected health insurance primary on your auto insurance policy but you don’t have health insurance?  Under the law, if an insured designates a health insurer as primary, and either does not actually have such insurance or the insurer refuses to cover the expense, the law obligates the automobile carrier to step into the shoes of the primary carrier and provide PIP Benefits.  But, the insured must pay any additional premium owed to the auto insurer.  Furthermore, the insured is subject to any deductible and co-payment required by law or selected under the statute, and the insured also is subject to a penalty provision calling for the payment of an additional $750 towards his own medical bills–over and above all other applicable deductibles–before PIP benefits become payable.  

Keep in mind that when an insured or a prospective insured elects to have the health insurer as the primary insurer, the automobile policy does not thereby exclude medical benefits.  Rather, the automobile insurer becomes a secondary medical benefits provider (because the insured or prospective insured elected to have the health insurer as the primary medical benefits provider)

This all may seem very confusing, and, at first glance, it definitely is confusing and complicated.
When purchasing auto insurance, you need to make an informed decision that takes into consideration many different factors.  Cost should not be the only factor that you consider.  You should consider all of your auto insurance options and coverages carefully when making your selections.  If you have specific questions about your auto insurance coverage, don’t hesitate to call one of Stark & Stark’s many experienced personal injury attorneys for a free consultation.  Our attorneys frequently give free seminars for the public on auto insurance topics at libraries and meeting spaces throughout the state.  We are a free resource to help you make an informed decision on your auto insurance coverage.  We’re here for you, so contact us if you have questions about auto insurance or any other personal injury issue.