Very often, people are unaware of their insurance coverage until they are involved in an accident and it is too late. Here is a basic overview of the types of coverage available to you and some of our recommendations. This is just a general overview. Your situation might be such that these recommendations would not be right for you. We strongly recommend that you call us for a free, no-obligation review of your present insurance coverage.
PIP BENEFITS
PIP benefits are personal injury protection benefits, and they include payment of medical expenses. Many people are surprised to learn that it is your own insurance company that pays your medical bills, even if the accident was someone else’s fault. The standard medical expense coverage is $250,000. While you do have the option of purchasing less than $250,000 — in fact, as little as $15,000 — we never recommend purchasing medical expense benefits less than $250,000.
HEALTH INSURANCE PRIMARY
You have the option to designate your health insurance as the primary payer of accident-related medical expenses in exchange for a reduction in premium. Note that you cannot designate Medicare or Medicaid as the primary payer. There are often downsides to designating your health insurance as primary. For example, your health insurance may be permitted to assert a lien on any third-party recovery. That means that your health insurer may be entitled to reimbursement from any money you receive in a settlement or judgment against the person who caused your accident.
THE RIGHT TO SUE
Believe it or not, even when you are injured in an accident caused by someone else, your insurance policy will dictate whether you are entitled to sue the responsible driver for noneconomic losses, or what we generally call “pain and suffering.” You may select either the “zero” or “no limitation” threshold or the “verbal” or “limitation on lawsuit” threshold. In general, if you have selected the “limitation on lawsuit” threshold, your right to sue the other party who caused your injuries is limited to cases in which you can objectively prove a permanent injury.
LIABILITY COVERAGE
Liability insurance pays someone you may injure as a result of your negligence. The minimum liability insurance required in New Jersey is $15,000. In the event you carry only minimal liability coverage, your personal assets could be at risk if you cause injury to others. We generally advise that you purchase as much liability coverage as you can afford.
UM/UIM COVERAGE
Uninsured and Underinsured Motorist Coverage steps into the shoes of someone who negligently causes injuries to you and who is either uninsured or underinsured. You can purchase UM and UIM coverage up to the same limits as your liability coverage. We recommend that you never purchase UM/UIM coverage that is less than your liability coverage.