When you’re hurt in a car crash, the first place you typically turn for compensation to cover your losses is insurance. Though it may seem that the at-fault party’s insurance company should pay your claim, that’s not how it works in New Jersey. Because New Jersey has adopted “no-fault” insurance (along with about a dozen other states), you don’t initially file a claim with the at-faultparty’s insurer; instead, you file with your own insurance company. That claim is known as a personal injury protection (PIP) claim.
In essence, a PIP claim is one you make with your own insurance provider to cover medical bills and lost wages. As a general rule, your insurer will reimburse you for the amount of your claim or the amount of your coverage, whichever is lower. If your medical bills exceed your PIP coverage, you are responsible for paying the excess amount, but you may be able to take legal action to recover those losses from the at-fault party, depending on the type of insurance you purchase and the kind of injuries you have. If your medical bills and lost income do not exceed the amount of your coverage, you have no legal claim against the at-fault party.
In New Jersey, a PIP claim typically pays for all necessary medical expenses related to the diagnosis and treatment of injuries sustained in a motor vehicle accident, capped at the policy limits. PIP also will cover some lost wages—the amount you receive depends on the terms of your policy. You also may be able to recover death benefits through a PIP claim.
If your losses exceed the amount of coverage under your policy, you can file a lawsuit for additional losses only if you purchased a policy with an unlimited right to sue, or if your injuries fall into one of the following categories:
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