NJ Auto Insurance PIP Law Needs To Be Followed

NJ Auto Insurance PIPPost Date September 6, 2012 – Anyone from the State of New Jersey’s knows how difficult is was to buy auto insurance coverage over a decade ago.  It’s been just a little over 10 years since Auto Insurance Reform finally came to the drivers of State of New Jersey.  A few weeks ago; The State of New Jersey’s Department of Banking and Insurance reminded NJ auto insurance carriers to provide the $250,000 default coverage limit on PIP (personal injury protection) benefits as a standard on private passenger vehicles.

NJ Auto Insurance PIP Law

New Jersey Department of Banking and Insurance acting commissioner, recently reminded all NJ Auto Insurance Companies that the Personal Injury Protection default limit should be at $250,000.  With that said, NJ Auto Insurance Buyers can choose and pay for much lower lower limits as outlined on the NJ Auto Insurance Application they need to sign.  This reminder from the New Jersey Insurance Department came as some in the government agency noticed many NJ  auto insurance companies  have not been following what is required under the NJ Auto Insurance Reform Bill which was signed a little over a decade before.  This statute stated that payment of medical expense and services benefits to persons who have sustained bodily injury shall not exceed $250,000 per person per accident.  However, N.J.S.A. 39: 6A-4.3e also states that NJ auto insurance carriers shall offer as a coverage option, medical benefits in the amounts of $50,000, $75,000, $150,000 or $15,000 per person per accident. But if the insurance applicant does not affirmatively opt for lower limits in writing, the insurer must then provide the $250,000 default PIP coverage limit.  The New Jersey Department of Insurance also warns if a NJ auto insurance company continues the practice, they will take the steps nessasary against those NJ Auto Insurance Carriers whom refuse to comply. Although NJ Auto Insurance customers have a choice to accept the lower PIP Limits, if they are involved in a serious accident  and you sustain  catostrophic injury, it’s possible your PIP Limit will be automatically increase to $250,000.


Michael E. Dortch
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