PIP vs. Health Insurance In NJ: Which Should Be Primary?

After a car accident in New Jersey, you have an important choice to make about your medical bills. You need to decide whether your PIP insurance or your health insurance should pay your medical bills first. This choice can affect how much money you get if you file a personal injury lawsuit. Let's look at both options and why choosing PIP as your primary coverage is usually the best decision.

Key Terms You Should Know

Primary Coverage: This is the insurance that pays your medical bills first.

Secondary Coverage: This insurance only pays if your primary insurance doesn't cover everything.

Coordination of Benefits: This is the process that decides which insurance company pays first when you have more than one type of insurance.

PIP (Personal Injury Protection): Car insurance that covers your medical bills after an accident, no matter who caused the crash.

What Is PIP Insurance?

PIP is a special type of car insurance that New Jersey requires all drivers to have. It pays for your medical bills and other costs after a car accident. The good thing about PIP is that it pays your bills right away, even if the accident was your fault. You don't have to wait for anyone to figure out who caused the crash. PIP can cover doctor visits, hospital stays, physical therapy, and sometimes even lost wages from missing work.

What Is Health Insurance?

Health insurance is the coverage you use for regular medical care, like when you get sick or need a check-up. Most people get health insurance through their job or buy it themselves. Health insurance can also pay for injuries from a car accident. However, health insurance companies usually want to be paid back if you win money in a lawsuit later.

Comparing PIP and Health Insurance

Here's a simple chart that shows the differences between using PIP and health insurance as your primary coverage:

Feature

PIP Primary

Health Insurance Primary

Who Gets Paid First?

Your PIP insurance

Your health insurance

Can They Ask for Money Back?

Usually NO - you keep your settlement

Usually YES - they can take money from your settlement

Which Doctors Can You See?

Any doctor you need

Only doctors in your insurance network

Do You Pay Copays or Deductibles?

Usually NO

Usually YES

How Fast Are Bills Paid?

Fast - designed for car accidents

Can be slower - not designed for accidents

Impact on Your Settlement Money

Better - you keep more money

Worse - insurance company takes some back

Why Choosing PIP Primary Is Usually Best

There are several good reasons to choose PIP as your primary coverage:

1. Keep More Money From Your Settlement

When you use PIP to pay your medical bills, that money is gone. The insurance company usually cannot ask for it back if you win a lawsuit. But if you use health insurance, the insurance company has the right to be paid back from your settlement money. This is called a "lien." Using PIP means more money stays in your pocket.

2. No Network Restrictions

Health insurance only lets you see certain doctors who are "in-network." If you need to see a specialist for your injuries, they might not be covered by your health insurance. PIP usually lets you see any doctor you need to see. This gives you more choices for your medical care.

3. Faster Payment

PIP is designed for car accidents, so it often pays bills faster than health insurance. This means your doctors get paid quickly, and you don't have to worry about bills piling up while you recover.

4. No Copays or Deductibles

Most health insurance plans make you pay some money out of your own pocket through copays and deductibles. PIP typically covers your medical bills without these extra costs. This can save you hundreds or even thousands of dollars.

How Your Choice Affects Your Personal Injury Case

The choice between PIP and health insurance can make a big difference in your personal injury lawsuit. Here's how:

If you use health insurance as primary, your insurance company can place a lien on your case. This means if you win $50,000 in your lawsuit and your health insurance paid $15,000 in medical bills, the insurance company gets $15,000 back. You only keep $35,000 (plus lawyer fees come out too).

If you use PIP as primary, the PIP money is usually gone for good. If your PIP pays $15,000 in medical bills and you win $50,000 in your lawsuit, you typically keep the full $50,000 (minus lawyer fees). The PIP company usually cannot ask for their money back. This can mean thousands of dollars more in your pocket.

Frequently Asked Questions

Can I change my mind after choosing?

It is very hard to change your choice once you start treatment. That's why it's important to pick the right option from the beginning. Talk to a lawyer before you start medical treatment if possible.

What if I don't have health insurance?

If you only have PIP, then PIP will automatically be your primary coverage. You don't need to make a choice. Your PIP will pay your medical bills up to your policy limit.

What if my PIP runs out?

If you use up all your PIP coverage, your health insurance becomes the secondary coverage and will start paying your remaining medical bills. This is another good reason to have both types of insurance.

Will using PIP make my car insurance go up?

PIP is "no-fault" insurance, which means using it should not affect your insurance rates if you were not at fault for the accident. However, every insurance company is different, so you may want to check your policy or ask your insurance agent.

Do I need a lawyer to help me choose?

While you can make this choice on your own, talking to a personal injury lawyer is a smart idea. A lawyer can look at your specific situation and help you understand which choice will give you the most money in the end. Most personal injury lawyers offer free consultations.

Final Thoughts

For most people in New Jersey, choosing PIP as primary coverage is the best option after a car accident. It protects more of your settlement money, gives you more freedom to choose doctors, and avoids the headache of insurance liens. However, every case is different. If you've been hurt in a car accident, talk to a personal injury lawyer right away. They can help you make the best choice for your situation and make sure you get all the money you deserve.