A thorough familiarity with New Jersey’s No-Fault Law, N.J.S.A. 39:6A-1 et seq., is essential to the successful litigation of an automobile personal injury case. Significant changes to the No-Fault Law were implemented via the Automobile Insurance Cost Reduction Act of 1998 (AICRA), and N.J.A.C. 11:3-3.1 et seq., AICRA’S implementing regulations. AICRA applies to policies purchased or renewed on or after March 22, 1999. AICRA, by creating a new “lawsuit limitation,” prevents a plaintiff from bringing a personal injury as defined by the statute. In addition, AICRA permits insurance companies to control the type and duration of medical treatment and diagnostic testing that will be compensated by the auto insurance’s personal injury protection (PIP) provisions.
Although AICRA has provided insurance companies with the means to regulate medical services, it should be stressed that the exact coverage provided may differ from carrier to carrier. Each client’s policy should be obtained to determine what precise limitations apply in a particular case.
AICRA provides that automobile owners may satisfy their statutory duty to maintain automobile insurance by purchasing either a standard policy, pursuant to N.J.S.A. 39:6A-3.1, or a special automobile policy pursuant to N.J.S.A. 39:6A-3.3.
- The Standard Policy
A “standard” policy must provide:
- $15,000/$30,000 per accident split-limit liability insurance coverage against personal injury, and
- $5000 per accident liability insurance coverage for property damage.
In addition, every standard policy must provide PIP coverage, as defined by N.J.S.A. 39:6A-4, for the benefit of the named insured; resident family members; and occupants and permissive users of the insured vehicle.
PIP coverage under a standard policy consists of:
- Medical expense benefits in an amount not to exceed $250,000 per person per accident, J.S.A. 39:6A-4a;
- Income continuation benefits, up to $100/week per person per accident, with a per person, per accident cap $5200, J.S.A. 39:6A-4b;
- Essential services benefits, up to $12/day per person per accident, with a per person, per accident cap of $4380, J.S.A. 39:6a-4c;
- Death benefits, J.S.A. 39:6A-4d, and
- Funeral expenses, J.S.A. 39:6A-4e.
In addition, each standard policy must provide the following coverage options:
- Medical expense benefits deductibles of $500, $1000, $2000, and $2500 per accident;
- The option to exclude income continuation, essential services, death and funeral benefits;
- The option to select health insurance coverage as primary;
- Lesser medical expense benefits coverage in the amounts of $150,000, $75,000, $50,000, or $15,000 per person per accident, except that $250,000 shall under any option be paid for catastrophic injuries. Any option to reduce medical expense benefits coverage must be affirmatively elected in writing and, in the absence of an affirmative election, the default medical expense benefits option is $250,000.
Any coverage options elected under N.J.S.A. 39:6A-4.3 apply only to the named insured and resident relatives not otherwise insured, but not to any other person eligible for PIP benefits under the policy. N.J.S.A. 39:6A-4.3.
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