There are twelve no-fault car insurance states in the U.S., and the great state of New Jersey is one of them. Not only that, but New Jersey’s no-fault insurance system is different from everyone else’s. It has special “choice” rules for suing at-fault drivers, as well as personal injury protection (PIP) insurance. If you live in the Garden State, you should know how no-fault car insurance works here. It might help to brush up on the different types of car insurance coverage, too.
How no-fault insurance works in NJ
You’re waiting at a red light on Halsey Street in Newark when you feel a jolt. The person behind you didn’t slow down in time. Now you and the other driver, Kevin, both have damaged bumpers. Your neck hurts from the impact, and Kevin’s airbag bruised his face. Because New Jersey is a no-fault state, you don’t need to prove to your insurance that the accident was Kevin’s fault to get your medical costs reimbursed. You and Kevin each file a claim with your own PIP insurance. Kevin’s PIP pays for him to go to the doctor for his face, and your PIP coverage pays for an MRI and the wages you lose after the doctor tells you to take a few days to rest and ice your neck. Luckily, you don’t need a neck brace, but PIP insurance would cover that too!
If your insurance didn’t pay enough of your medical costs and lost wages, you might decide to sue Kevin for the rest of the money you need. But, because of New Jersey’s “choice” law, the insurance policy you chose might mean you can’t sue Kevin for non-monetary damages like pain and suffering.
What’s covered under no fault insurance in NJ?
As we saw above, New Jersey’s no-fault car insurance coverage system means that your policy in the state will pay for your medical expenses from an accident, without you having to prove whose fault the accident was. Depending on whether you have a Basic policy or a Standard policy, no-fault insurance in New Jersey covers the following, if they were caused by your car accident injuries:
Who pays for car damage?
No-fault insurance rules don’t apply to car damage from accidents in New Jersey. With your and Kevin’s rear-ending accident, you need to get Kevin’s insurance information and contact his insurer if you want them to pay to repair your car. Kevin’s insurer will investigate the claim and decide if the accident was his fault. If the insurer decides that the accident was at least 51 percent Kevin’s fault, Kevin’s liability insurance coverage will kick in to pay for your repairs. The amount they’ll pay depends on how much damage Kevin caused, what the limits on his policy are, and how much of the fault they assign to Kevin. For example, if the insurance company decides Kevin is 70 percent at fault, they’ll pay 70 percent of your damages, up to the policy limits. You can look to your own insurance policy for the rest, assuming you have collision coverage. Kevin will also need to have collision insurance to get his insurance company to cover repairs to his car for the accident. Maybe he’ll think twice before texting and driving next time.
NJ’s “no pay, no play” law
New Jersey’s “no pay, no play” law forbids uninsured drivers from suing for certain types of compensation. If, in the scenario with Kevin, you didn’t have car insurance, you could still sue Kevin for economic damages like property damage, but New Jersey revised statute section 39:6A-4.5 would bar you from collecting payouts for pain and suffering, mental anguish, or personal injury. The law might also limit how much you could collect for property damage.
Having car insurance in New Jersey shields you from the consequences of the “no pay, no play” law. Relying on your health insurance alone to cover injuries after an accident could leave you with some serious medical debt. Having car insurance is a legal requirement in New Jersey, but it’s also just a good idea.
If you’re looking for New Jersey car insurance or need help understanding how no-fault insurance laws should affect the policy you pick, call Surround Insurance. We keep it simple.