I’m Eric Shore, founder of The Law Offices of Eric A. Shore, and I’ve been helping injured people across New Jersey answer this exact question since 1994.
Key Takeaways
- New Jersey is a no-fault state. Your own car insurance pays your medical bills first, regardless of who caused the crash.
- Most drivers carry at least $15,000 in Personal Injury Protection, or PIP, coverage. Some policies go up to $250,000.
- Paying first does not mean your insurance company is legally responsible. Fault and payment are two separate issues.
- Continuing treatment after PIP runs out can directly affect how much your case is worth later.
Yesterday I spoke with a woman who had been rear-ended in New Jersey. She believed the driver who hit her may have been under the influence, and she was upset when I explained that her own automobile insurance would likely pay her medical bills first.
Her reaction was the same one I hear all the time.
“Why should my insurance pay? He hit me.”
I explained that New Jersey’s no-fault system doesn’t focus on who caused the accident when it comes to getting medical treatment started. Instead, it focuses on making sure injured people can get care right away. That’s why your own Personal Injury Protection, or PIP coverage, generally pays first.
I also explained that this doesn’t let the other driver off the hook.
“Don’t worry,” I told her. “We’re still going to pursue the other driver’s insurance company for the damage to your vehicle, your lost wages, your pain and suffering, and any other compensation you may be entitled to. We’ll also use your medical records and treatment to help demonstrate how serious your injuries are. But the actual medical bills themselves are usually paid by your own automobile insurance first.”
Once she understood the difference between paying medical bills and being legally responsible for the accident, she was relieved.
That conversation happens all the time, and it’s one of the reasons so many people are surprised when they first learn how New Jersey’s no-fault insurance system works.
Why Does New Jersey Make My Own Insurance Pay First?
New Jersey is a no-fault state. That means your own automobile insurance generally pays your medical bills first, regardless of who caused the accident.
Whether you were hit on the Turnpike, Route 295, Route 70, Route 73, or a local road in Cherry Hill, Moorestown, Marlton, Voorhees, or elsewhere in South Jersey, the same basic rule usually applies.
At first, that sounds unfair. In practice, it often helps injured people get medical treatment much faster. I’ve had clients tell me years later that they were grateful for this rule, even though it confused them on day one.
The alternative would be a system where you have to prove the other driver was at fault before an insurance company pays for your treatment. That could mean waiting weeks or months while insurance companies investigate the crash, interview witnesses, review police reports, and argue about who was responsible.
If you need an MRI, physical therapy, surgery, or specialist care, waiting months for treatment would create problems for both your health and your recovery.
What Is PIP and How Much Coverage Do I Have?
Instead of a fault-first system, New Jersey requires most drivers to carry Personal Injury Protection coverage, commonly known as PIP. This coverage is designed to pay for medical treatment immediately after an accident without requiring you to prove fault first.
Most New Jersey drivers carry at least $15,000 in PIP coverage, although many choose higher limits. Some policies provide up to $250,000 in available medical benefits.
If you’ve ever wondered why hospitals ask for your automobile insurance information after a car accident, that’s the reason.
When you’re treated at Cooper University Hospital, Virtua, Jefferson, AtlantiCare, or another hospital following a crash, medical providers will often look to your PIP coverage before billing anyone else.
Depending on your policy, PIP may help cover emergency room treatment, ambulance transportation, diagnostic testing, surgery, physical therapy, follow-up care, and other accident-related medical expenses.
You can learn more about New Jersey’s insurance requirements through the New Jersey Department of Banking and Insurance:
Does PIP Paying First Mean the Other Driver Isn’t Responsible?
No.
One of the biggest misconceptions I see, even after more than 30 years of handling these cases, is that people assume whoever pays the medical bills first is automatically the person who is legally responsible for the crash.
Those are actually two separate issues.
PIP determines how your medical treatment gets paid while you’re recovering. Liability determines who may ultimately owe compensation for your injuries, lost wages, pain and suffering, future medical expenses, and other damages.
In other words, your insurance may pay first, but that doesn’t necessarily mean your insurance bears the final financial responsibility.
What If I Was a Passenger or Driving Someone Else’s Car?
People often ask me about situations involving passengers, family vehicles, and household members.
The answer depends on the facts.
If you were driving your parents’ car, riding as a passenger, or living with a family member who has automobile insurance, there may be multiple policies that could potentially provide coverage.
These situations can become complicated quickly, which is one reason it’s important to identify every available source of insurance after a serious accident.
Another concern I hear frequently is whether using PIP means you’re somehow paying your own medical bills. That’s not really what’s happening.
You’re using a benefit you’ve already paid for through your insurance premiums. PIP exists specifically so injured people can get treatment right away rather than waiting for a legal dispute about fault to be resolved.
What Other Coverage Might Be Available to Me?
The better question isn’t, “Why is my insurance paying?”
The better question is, “What insurance coverage is available to help me recover?”
In many cases, there may be several potential sources of coverage, and they often come into play in a certain order.
Your own car insurance is usually the first one. If liability is established, the at-fault driver’s insurance may be next. After that, your health insurance, or in some cases Medicare or Medicaid, may end up covering what’s left.
Most people think of a car accident as one simple event, but it often involves several different ways your bills actually get paid, and each one works a little differently.
Many people are surprised to learn that paying medical bills and compensating you for your injuries are often two different issues.
If you’re wondering what compensation may be available after a serious crash, you may also find helpful information in our guide:
Frequently Asked Questions
Can I Use My Health Insurance, Medicaid, or Medicare Instead of PIP?
Generally, no, not as a first option. Your automobile insurance is usually primary after a New Jersey car accident, which means PIP should be billed before health insurance, Medicare, or Medicaid.
In some situations, other insurance may become involved after available PIP benefits are exhausted.
If Medicare or Medicaid pays for accident-related treatment, reimbursement obligations may apply if you later recover money through a settlement or verdict.
Will I Have to Pay My PIP Benefits Back Out of My Settlement?
Usually not.
Unlike some forms of health insurance, New Jersey PIP benefits generally do not have to be repaid from your personal injury settlement.
However, every case is different. Other liens or reimbursement claims may exist, including Medicare, Medicaid, workers’ compensation, or certain health insurance plans.
Identifying those issues early can help avoid surprises when a case settles.
Should I Stop Going to the Doctor Once My PIP Benefits Run Out?
No.
In more than 30 years helping injured people throughout New Jersey, this is one of the most consequential mistakes I see, and it’s almost always made for the same reason: people are worried about owing money.
Some patients stop treatment once PIP runs out because they’re afraid of what they might have to pay back to their health insurance, Medicare, or Medicaid later.
Here’s why that’s usually the wrong move.
First, your health comes first. Stopping treatment before you’ve actually recovered doesn’t make the injury go away. It simply delays getting better.
Second, insurance companies look closely at medical records when evaluating injury claims. They often consider whether an injured person followed medical advice and completed recommended treatment.
Stopping treatment too early can affect both your recovery and the value of your case.
If your doctor recommends physical therapy, injections, surgery, or other treatment, it’s important to make decisions based on your health rather than fear of future bills.
Injured in a New Jersey Car Accident?
If you’re injured in a New Jersey car accident, one of the worst mistakes you can make is assuming you understand how the insurance system works.
Many people don’t realize there may be multiple policies, multiple sources of coverage, and multiple claims available after a serious crash.
After more than 30 years helping injured people throughout New Jersey, I can tell you that understanding how PIP works is often the first step toward protecting your health, your finances, and your case.
If you have questions about your treatment, your coverage, or your rights after a New Jersey accident, call The Law Offices of Eric A. Shore at 1-800-CANT-WORK.
Eric Shore is the founder of The Law Offices of Eric A. Shore. Since 1994, he has helped thousands of people injured in car accidents, truck accidents, Uber and Lyft accidents, pedestrian accidents, and other serious injury cases throughout New Jersey.
