Automobile Insurance continues to be the subject of lawsuits in New Jersey. Recently the State Supreme Court decided the case of Haines v Taft, which raises a red flag to which all NJ drivers should pay attention. By way of background, New Jersey is what is called a “no fault” state for auto insurance. This means that you have the RIGHT to have your reasonable and necessary medical bills paid by your own insurance company according to a fee schedule immediately after an accident, no matter who or what caused it; you do not have to wait to prove that someone was at fault.
Note two important points from the previous sentence: Costs have to be reasonable and necessary as the law defines those terms; and medical providers are paid an agreed upon amount by a published fee schedule. Most significant is the fact that the amount of medical expense that will be covered is determined according to each person’s OWN policy. So, for example, you can buy a policy that allows up to $250,000 of covered medical expenses – or you can buy one that has the state minimum of only $15,000.
If you have looked at medical costs lately, you might easily understand that 15K does not go very far when it comes to emergency room and Doctor costs if you have been in an accident. So, first lesson for today: do NOT buy only $15,000 of medical expense (Personal Injury Protection or PIP) coverage. $250,000 of coverage for your peace of mind and that of your family is only slightly more expensive, but so worth it, which bring us to the Haines decision.
First, please note that when the NJ Supreme court rules on a case, the decision is binding on all lower and trial courts. Next, we look at the facts of that case. The injured plaintiffs in Haines had only $15,000 of medical (PIP) coverage. Each person was not hurt badly enough to meet the requirements of the law to be able to bring a lawsuit for pain and suffering (This is called the lawsuit threshold which is another part of No Fault to be discussed in another blog post…..but NO threshold is the better choice). But each of the injured persons had medical expenses over and above their $15K of coverage. So, they sued the other driver, not for pain and suffering, but just for the uncovered medical out of pocket expenses.
Sounds simple, right? But wait: in the Haines decision, The Supreme Court interpreted NJ Insurance law as they believe the law intended (and as the insurance company argued) to mean that injured persons who picked $15,000 of medical coverage could NOT sue for any balances due. The plaintiff injured persons in Haines are stuck with the unpaid balances and are liable for those expenses even if the other driver or drivers were completely at fault.
How can you prevent this from happening to you or your loved ones? In order to answer this question, you must understand something unique about auto insurance in NJ: it is the only business you can think of that wants you to buy the cheapest product they offer. If you go to the store to buy a toaster oven, they will try and sell you the most expensive toaster oven. Not so with auto insurance. Your insurance broker or agent or even online wants to sell you the cheaper product. Insurance companies want to restrict your rights, the less they have to pay out, the more they keep. So they want you to buy the cheapest policy with the least amount of benefits to you. Each year when you renew or take out your insurance policy, you get a “buyers guide” . It is very hard to understand the choices you are asked to make. But the law says that if you received it, it is presumed not only that you read it, but also that you understood it. Think about that for a moment.
So, look at your choices and choose $250,000 of PIP coverage. Recently, it has been estimated that as much as 60% of drivers are uninsured, driving around every day with NO insurance….a threat to you and your family. Protect yourself. Never buy minimum 15K PIP coverage or the for that matter, only $30,000 minimum Bodily Injury coverage. Always buy $250,000 of coverage. Here at the Locks Law Firm we hope you never have an accident and never need to use this coverage, but if you do, have the peace of mind of knowing that you have protected yourself and those who matter to you.