New Jersey PIP Benefits: What the Standard Policy Covers

By the FigureMyTax Editorial Team · How we calculate

New Jersey personal injury protection pays, whoever caused the accident, medical expense benefits of $250,000 unless a lower limit was chosen, income continuation of up to $100 a week (limit $5,200), and essential services of up to $12 a day (limit $4,380).

Medical expense benefits

N.J.S.A. 39:6A-4.3 says that if none of the lower medical limits is affirmatively chosen in writing, the policy provides $250,000 of medical expense benefits. The insured may instead choose $150,000, $75,000, $50,000 or $15,000 per person per accident, but up to $250,000 is still paid for treatment of permanent or significant brain injury, spinal cord injury or disfigurement, and for treatment of other permanent or significant injuries at a trauma center or acute care hospital until the patient is stable. The election form must say, in 12-point bold type, that a lower limit means less coverage than the former $250,000.

Deductibles and health insurance first

Insurers must offer medical expense deductibles of $500, $1,000, $2,000 and $2,500 for any one accident, an option to exclude income continuation, essential services and death-type benefits, and an option making your other health coverage primary, in which case the auto insurer pays reasonable medical expenses the health coverage does not, up to the medical limit, and coordination of benefits applies. Premium reductions apply to each option.

Income and services

Section 39:6A-4 pays income continuation benefits for the loss of income of an income producer, subject to a maximum weekly payment of $100 and a limit of $5,200, and never more than the net income normally earned. Essential services benefits reimburse necessary and reasonable expenses for substitute services you ordinarily performed for yourself and your family, subject to $12 a day and a limit of $4,380. Funeral, burial and cremation expenses are payable up to $1,000.

How PIP interacts with a lawsuit

Evidence of amounts collectible or paid under PIP, including deductibles, copayments and exclusions, is inadmissible in a tort action, and an insurer paying PIP has a limited right to recover from a tortfeasor who was not required to carry PIP (39:6A-12 and 39:6A-9.1).

Using the calculator

A worked example: with $40,000 of medical expenses and $1,000 a week of lost income for eight weeks, PIP pays $40,000 plus $800 of income continuation, or $40,800. Run your own numbers in the New Jersey no-fault calculator, then read the tort threshold and how the tort option is chosen. If the other driver has little insurance, see New Jersey UM/UIM stacking.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how New Jersey's rules apply to your specific case with a licensed New Jersey attorney.