When you are not at fault in an accident, you might expect the other driver’s insurance to cover your medical bills, but that is not the case in New Jersey. Your Personal Injury Protection (PIP) coverage, a mandatory part of every auto insurance policy in the state, will step in to pay for your medical treatment, lost wages, and other out-of-pocket expenses up to your policy limits.
The question “How does no-fault car insurance work?” can be answered simply: Your insurance is your first line of defense for injury-related costs, regardless of who caused the accident. PIP benefits can also cover essential services like child care or household assistance if your injuries prevent you from handling these tasks.
Filing a Third-Party Claim in New Jersey
While no-fault auto insurance covers your medical expenses through PIP, you may still be able to pursue compensation from the at-fault driver’s insurance for property damage and, in some cases, pain and suffering.
Property Damage
If the other driver is responsible for the accident, you should first check with your own insurance company to see if there is coverage for collision under your policy. Your auto insurance company will then try to seek reimbursement from the at-fault driver’s auto insurance which in some cases may include your deductible. If you do not have collision coverage, you will need to seek property damage from the at-fault driver’s policy.
Personal Injury
In certain situations, you may also file a third-party personal injury claim against the at-fault driver’s insurance, depending on the coverage you have selected under your policy. New Jersey drivers choose between a limited right to sue or unlimited right to sue policy, which determines the circumstances under which you can sue for pain and suffering.
Limited vs. Unlimited Right to Sue in New Jersey
The right to sue is a critical component of auto insurance in New Jersey, especially when determining whether you can seek compensation for noneconomic damages, such as pain and suffering.
Limited Right to Sue
If you have selected a limited right-to-sue policy, you can only file a lawsuit for pain and suffering if your injuries meet certain thresholds, such as significant disfigurement, loss of a body part, or a permanent injury. This option often comes with lower insurance premiums but restricts your ability to seek compensation for noneconomic damages in most cases.
Unlimited Right to Sue
On the other hand, an unlimited right-to-sue policy allows you to sue the at-fault driver for pain and suffering regardless of the severity of your injuries. This policy has higher premiums but provides broader protection if you sustain injuries in an accident.
What Does Personal Injury Protection (PIP) Cover?
Personal Injury Protection (PIP) is crucial to no-fault auto insurance in New Jersey. PIP covers more than just your medical bills after an accident—it can also compensate you for various other expenses related to your injury, up to your policy limits. Coverage typically includes medical expenses, lost wages, and essential services like child care and funeral expenses.
Exceptions to the No-Fault Auto Insurance System
While the no-fault auto insurance system generally applies to personal injury claims, some exceptions exist. As previously mentioned, if your injuries meet the state’s criteria for serious injury or if you’ve opted for an unlimited right-to-sue policy, you may be able to file a lawsuit against the at-fault driver for pain and suffering.
Additionally, the no-fault system does not apply to property damage claims. If your car sustains damage in an accident caused by another driver, you will file a claim with their insurance to cover the cost of repairs.
Summary: How Does Car Insurance Work?
New Jersey’s no-fault auto insurance system can be complex, especially when you are not at fault for an accident. Although no-fault car insurance requires you to file claims with your own insurance for injuries, you can still pursue compensation from the at-fault driver for property damage and, in some cases, pain and suffering. Understanding your rights under the no-fault system and the differences between limited and unlimited right-to-sue policies can help you make informed decisions after an accident.
If you have been injured in a car accident and have questions about your insurance coverage or your right to sue, the experienced car accident attorneys at Petro Cohen can help. Contact us today for a free consultation to discuss your options and ensure you receive the compensation you deserve.
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