How New Jersey’s No Fault Insurance Law is applied to a Hypothetical Automobile Accident
Under New Jersey’s No Fault Insurance System, who is responsible for your medical bills and what requirements are there to be able to bring a claim for bodily injuries when you are involved in a car accident is a complicated question. Under the law in New Jersey, medical bills are primarily covered by Personal Injured Protection (“PIP“) benefits that are contained within most car insurance policies (Standard policies must carry at least $15,000.00 in PIP benefits but Basic and Special policies often carry none at all). But it is often difficult to determine what PIP policies cover who in what situation. Additionally, whether someone can bring a claim for any injury suffered (Zero Threshold) or will be unable to bring a claim at all unless they can show a permanent injury that will never heal to function normally (Verbal Threshold) is a fact sensitive question that has to do with the insurance policies themselves, who the accident victim lives with, and the type of vehicles involved. Thankfully, Daniel E. Rosner of Rosner Law Offices, P.C. has put together the following hypothetical to help answer these questions:
Archie is driving his late-model SUV with his wife Edith, his daughter Gloria and her husband Mike (Meathead) along with the next door neighbor George, and his son Lionel. For our hypothetical, they all live in Vineland, NJ. George’s car is in the repair shop and Archie agreed to take George and his son to their dry cleaning shop.
They are hit by a 2002 Toyota Prius driven by Maude. As a result of the impact, Archie’s SUV strikes a pedestrian, Ricky Ricardo, who was crossing in the cross walk at the time of the accident.
Everyone involved was injured and went to South Jersey Regional Medical center where they were all treated and released.
Archie was insured by NJM and has a standard PIP with a limitation on lawsuit threshold on his policy. He is the only named insured on the policy as his wife Edith does not drive. Mike and Gloria do not own a car as Mike is still a student. They both live with Archie and Edith.
George owns a car that is insured with Allstate. He has no limitation on lawsuit on the policy with 15K in PIP benefits, with health insurance primary. Lionel does not live with his father and does own his own car, but does not have current insurance on the car, as he is rebuilding the engine since it needs to be replaced. The car is still registered in NJ.
Maude has a special policy (dollar a day) since she has fallen on hard times and the acting business has not been doing well. She is insured with Praetorian Insurance Company.
Ricky Ricardo was walking home from his day job at Pep Boys where he works as an auto mechanic. He is a singer at Eugene’s nightclub in the evenings, a local Latin club. He lives with his girlfriend, Lucy, who does own a car that is insured with Geico with a 15k in PIP benefits and a Limitation of Lawsuit threshold. Ricky is listed on the policy as an additional driver only.
- What Tort threshold applies to each person? [For tort threshold, the household policies combined with familial relationships will control, unless there is an exception]
- What PIP benefits are available to each person injured
- Who is responsible to pay the PIP benefits?
HERE ARE THE ANSWERS:
- Archie: Limitation Of Lawsuit tort threshold (“LOL”), 250k pip with standard co-pay/deductible (NJM)1
- Edith: LOL, 250k pip with standard co-pay/deductible (NJM)2
- Gloria: LOL, 250k pip with standard co-pay/deductible (NJM)3
- Meathead: No Limitation Of Lawsuit tort threshold, (“No LOL”) 250k pip with standard co-pay/deductible (NJM)4
1 Archie: Answer found in NJSA 39:6A-8.1: a. Election of a tort option pursuant to section 8 of P.L. 1972, c. 70 (C. 39:6A-8) shall be in writing and signed by the named insured on the coverage selection form required by section 17 of P.L. 1983, c. 362 (C. 39:6A-23). The form shall state the percentage difference in the premium rates or the dollar savings between the two tort options. The tort option elected shall apply to the named insured and any immediate family member residing in the named insured’s household. “Immediate family member” means the spouse of the named insured and any child of the named insured or spouse residing in the named insured’s household, who is not a named insured under another automobile insurance policy.
2 Edith: Answer found in NJSA 39:6A-8.1(d): d. The tort option elected by the named insured shall apply to all automobiles owned by the named insured and to any immediate family member who is not a named insured under another automobile insurance policy…
3 Gloria: LOL, 250k pip with standard copay/ded(NJM) Answer found in NJSA 39:6A-8.1(d), same analysis as Edith.
4 Meathead: Answer found in NJSA 39:6A-8.1(d): The verbal threshold is inapplicable to a person who is eligible for PIP benefits as a permissive user, passenger, or non-immediate family member of an insured who is not required to maintain PIP coverage is for accidents. Since Meathead is not a direct family member of the named insured Archie, then he is not bound by Archie’s choice of threshold, but is an eligible passenger in the car entitled to PIP.
- George: No LOL, Health insurance primary, 15k pip with standard co-pay/ded, unless no health insurance, then 750 ded. (Allstate)5
- Lionel: No LOL, 250k pip with standard co-pay/ded (NJM)(Assuming he can prove not wrongfully uninsured).6
- Maude: LOL, E/R only PIP, Praetorian7
- Ricky: No LOL, 250 PIP with standard co-pay/ded (Uninsured pedestrian pip through PLIGA)8
5 George: Answer found in NJSA 39:6A-8.1(d): d. The tort option elected by the named insured shall apply to all automobiles owned by the named insured…
6 Lionel: NJSA 39:6A-7(b)(1), but in order for Lionel to collect PIP from host vehicle he must show he was not culpably insured. NJM, the host vehicle will cover for PIP as long as Lionel can prove not culpably insured. For Lionel, the benefit preclusion in N.J.S.A. 39:6A-7(b)(1) applies only to vehicles that were “being operated” at the time of the accident. The ultimate burden of persuasion on the issue of exclusion is on the insurer. The PIP claimant must then come forward and show that his automobile was not being operated in or around the time of the accident, based on a conscious determination to prevent such use of the uninsured vehicle. Gibson v. New Jersey Mfrs. Ins. Co., 261 N.J. Super 579 (App. Div. 1993).
7 Maude: Answer found in NJSA 39:6A-3.3(b)(1): “…’Emergency personal injury protection coverage’ issued pursuant to this section means and includes only payment of treatment for emergency care in an amount not to exceed $250,000 per person per accident. ‘Emergency care’ means all medically necessary treatment of a traumatic injury or a medical condition manifesting itself by acute symptoms of sufficient severity such that absence of immediate attention could reasonably be expected to result in: death; serious impairment to bodily functions; or serious dysfunction of a bodily organ or part…
8 Ricky: Answer found under Pedestrian PIP for uninsured pedestrians in 39:6-86.1 UCJF benefits. When any person qualified to receive payments under the provisions of the “Unsatisfied Claim and Judgment Fund Law” suffers bodily injury or death as a pedestrian…for which personal injury protection benefits under the “New Jersey Automobile Reparation Reform Act,” P.L.1972, c.70 (C.39:6A-1 et seq.), or… when a pedestrian suffers bodily injury as provided by section 35 of P.L.2003, c.89 (C.39:6-86.7) then in such event the Unsatisfied Claim and Judgment Fund shall provide [the benefits enumerated in the statute].
Since Ricky is not a named insured on his girlfriend Lucy’s policy, he becomes an uninsured pedestrian that does not own a car. Uninsured pedestrians are covered by UCJF/PLIGA pursuant to N.J.S.A. 39:6-86.1, which is not within the ambit of N.J.S.A. 39: 6A-8. Given the 1990 amendment, it seems clear that such persons are not subject to the verbal threshold. Source: Craig & Pomeroy, New Jersey Auto Insurance Law (GANN, 2012) at 383-384.
Daniel E. Rosner, Esq. – Certified Civil Trial Attorney