Question: What are the new PIP rules for New Jersey? I heard 2013 brought about some changes, but I don’t really understand how they will affect me.
Answer: The new personal injury protection (PIP) regulations that went in effect Jan. 4, 2013, in New Jersey don’t affect how much PIP you buy or how you make a PIP claim; they are really administrative changes directed toward health care providers and auto insurance companies.
New Jersey continues to be a choice no-fault car insurance state.
Drivers in New Jersey must still carry PIP in limits of at least $15,000 per person, per accident, and up to $250,000 for certain catastrophic injuries (the nation’s second highest offering of PIP benefits; only Michigan is higher). The “choice” comes in because you can choose to pay an extra premium and keep an unlimited right to sue for pain and suffering and other non-economic losses.
We spoke to the New Jersey Department of Banking and Insurance (DOBI) about the new regulations and how they affect car owners like you. Their representative verified that the way in which consumers use their PIP coverage hasn’t changed. He said the new rules deal mostly with how health care providers register to be a PIP vendor, the internal appeals process and changes to medical fee schedules.
In 2009, automobile medical fee schedules were created to set limits on the amount health care providers could charge for certain procedures. The new changes update these schedules to try and rein in costs. (You can view the medical fee schedule changes and new rules for PIP dispute resolution on the DOBI site).
The PIP regulation changes came about due to a requirement that says the DOBI must evaluate the PIP system every two years. This is mandated so that the state can stay on top of fraud related to PIP and also close loopholes that may be allowing some to manipulate the system and drive up costs.
The hope by the state is that this round of changes will help cap PIP expenses and control the rising medical costs that car insurance companies pay out (and that they pass onto you through rate increases).
There are critics out there that say the new fee schedule is too limiting. A medical group even requested a stay of the new regulations, but it was denied by the New Jersey Superior Court.
Ultimately, the state is trying to do its part to keep no-fault car insurance costs affordable to drivers of New Jersey with their continual updates to the PIP system as a whole. Will it work? Only time will tell.
The best way for you to do your part to keep your personal auto insurance costs down is to continually shop around for the cheapest car insurance rates. Taking the time to comparison shop for car insurance can save you hundreds, if not much more, on your annual premium. (See “12 ways to double-check your savings.”)