New Jersey is a “No Fault” state, which means when you are involved in a car accident YOUR own automobile insurance policy, or health insurance carrier, provides coverage for payment of your accident-related medical bills. This is also true when another driver is at fault for the accident.

When you buy automobile insurance, you will encounter the phrase “Personal Injury Protection” coverage (PIP). This coverage is designed to provide coverage for your accident-related medical bills. Thus, of course, it would be wise to purchase the highest “PIP” limit that you can afford so that your accident-related medical bills are paid.

Unfortunately, most people do not realize, UNTIL AFTER AN ACCIDENT, that they have designated their health insurance carrier as “primary” in the case of an automobile accident. What this means is, even though you have paid a premium for PIP coverage under your automobile policy, your health insurance carrier will be the primary payer of your accident-related medical bills.   

Designating your health insurance carrier as “primary” in the case of an accident could prove very costly. You will be charged a penalty by your automobile insurance carrier should your health insurance coverage lapse or should it fail to provide coverage for certain types of treatment. Further, if your health insurance carrier is an ERISA plan, you will be required to reimburse it from the monies recovery that you may obtain for your accident-related injuries. This means that you may receive less from a settlement or jury award. On the other hand, your automobile insurance carrier does not require reimbursement for its payment of any accident-related medical bills.

Thus, it would be wise of you to speak with your automobile insurance representative and discuss the advantages of designating your PIP coverage as “primary” in case of an automobile accident.