Personal Injury Protection (PIP) is an auto insurance coverage mandated in New Jersey. Depending on the PIP option that you select, your PIP insurance will provide either primary or secondary coverage for any injuries that occur in auto-related accidents. A full PIP option provides coverage for other needs, such as income continuation or funeral expenses.
Question: If I choose Medical Only Health Primary, what am I paying for? Doesn’t this option mean that my health insurance covers my losses?
New Jersey’s no-fault (personal injury protection or PIP) choices are unique and can be a bit confusing at first. In New Jersey, you choose a personal injury protection plan as part of your auto insurance policy and this coverage will extend to all of the cars on your policy.
The New Jersey Motor Vehicle Commission mandates three types of coverage for registered vehicles in the state. These are:
- Liability Insurance: Pays for damages when you cause an accident, but it does not include insurance for medical expenses related to the accident.
- Personal Injury Protection: Pays for medical expenses no matter who is at fault in an accident.
- Uninsured Motorist Coverage: Provides coverage when you are in an accident and the other person has no coverage.
Understanding PIP insurance in New Jersey
In short, PIP covers your reasonable expenses if you or your passengers are injured in an auto accident, regardless of fault. You may choose from four types of PIP coverage in New Jersey. When getting car insurance quotes, you can select any PIP options.
- Full PIP Primary: Provides primary coverage for injuries sustained by you or your passengers in an auto accident. This option also covers income continuation, funeral expenses, death benefits, and essential services expenses.
- Full PIP Health Primary: Should be purchased if another health insurance provider acts as the primary coverage for injuries sustained by you or your passengers in an auto accident, meaning your PIP insurance is secondary coverage. Like full PIP Primary, this option also covers income continuation, funeral expenses, death benefits, and essential services expenses.
- Medical Only PIP Primary: Acts as the primary coverage for injuries sustained by you or your passengers in an auto accident. This does not include coverage for other options like full PIP coverage.
- Medical Only PIP Health Primary: Should be purchased if another health insurance provider acts as the primary coverage for injuries sustained by you or your passengers in an auto accident. This does not include coverage for other options like full PIP coverage.
Additionally, Full PIP Health Primary and Medical Only Health Primary are not available if you use Medicare or Medicaid as a primary health insurance provider or when you are an active military member.
PIP health primary vs. PIP primary
While all four choices include medical coverage, the difference is that PIP Health primary or Medical Only Health Primary has your health insurance company act as the first payer or primary payer for health-related expenses. PIP Primary and Medical Only Health Primary mean that your PIP insurance is the primary provider of coverage for these expenses.
If you are satisfied with the coverage provided through your health insurance provider, you can select ‘health insurance as PIP provider’ on your auto insurance coverage selection form. However, since some health insurers do not provide coverage for accident-related injuries or you are not sure or are not satisfied with what your health insurance covers, you may want to select Full PIP Primary or Medical Only PIP Primary.
Keep in mind that if you choose your health insurance as your primary medical provider and that policy is lapsed at the time of an auto accident, you auto insurance will pay PIP benefits. However, you will be required to pay a $750 deductible.
Full coverage vs. medical-only coverage
With Options 1 and 2, you get the extra coverages such as income continuation which means if a covered individual is unable to work, PIP will help pay for income compensation. Also, funeral expenses are available so that if a covered individual dies from accident-related injuries, PIP will pay a maximum amount, as listed in your policy, towards funeral expenses. Death benefits are paid to the insured’s beneficiary of a stated amount in your policy if a covered individual dies from accident-related injuries.
With Medical Only Health Primary, you don’t have these extra coverages, like you would with options 1 or 2. Before choosing Medical Only Health Primary, you first want to ensure your health insurance covers injuries you sustained in an auto accident. If it did and you choose Medical Only Health Primary, you would get coverage from your auto insurance’s PIP as secondary coverage if needed only after your health insurance was used as primary coverage.
Cost savings of PIP medical-only PIP health primary
Cost savings with PIP can also be achieved in New Jersey by using your health insurance as a primary source of coverage in the case of injury related to an auto accident. Before selecting this option, you need to determine if your health insurance will cover auto accident injuries and how much coverage is provided. Medicare and Medicaid do not offer the Health Care Primary option. Still, they may provide coverage on a secondary basis, such as when the costs of your care exceed the PIP limits in your auto policy.
PIP is available in many states and each state deals with the combined or overlapping of health insurance and car insurance coverage issue in different ways. For example, in some states that require PIP, you can select a high deductible so you aren’t buying coverage that your primary health insurance provider may cover.
Even with this lower car insurance premium option, you are still buying a portion/type of health insurance through your car insurance provider. Since a state requires it, you can choose Med Only Health Primary option to mitigate that issue.
Get started with low-cost car insurance quotes for New Jersey.
— Prachi Singh and Michelle Megna contributed to this story
New Jersey Motor Vehicle Commission. “Insurance Requirements.” Accessed November 2022.
State of New Jersey Department of Banking & Insurance. “Selecting Your Health Insurance Pip Option.” Accessed November 2022.