According to data published by the National Safety Council, which is America’s leading nonprofit safety advocate, in 2018, approximately 4.4 million people were injured so severely in a motor vehicle accident that they required medical attention or hospitalization.

In addition to tremendous and often prolonged physical pain and suffering — which may include reduced mobility or permanent disability — many people hurt in a vehicle accident face enormous medical bills that would seriously reduce or in some cases altogether eliminate their life’s savings and total net worth. In light of this chilling possibility, many drivers are anxiously wondering: “who pays my medical bills if I am hurt in a vehicle accident?”

Personal Injury Protection and No-Fault Laws

Answering this question involves exploring a feature of auto insurance called Personal Injury Protection (PIP). However, before doing that, it is helpful to temporarily shift focus and clarify something that many people find highly perplexing: no-fault laws.

“What is most confusing about no-fault laws is that they are called no-fault laws, which implies that nobody is ever at fault in a vehicle accident — which is obviously wrong,” commented Evans C. Agrapidis, an experienced personal injury and accident lawyer, and a founding member of the law firm Agrapidis&Maroules, P.C. “We all know — hopefully not from personal experience — that in some types of vehicle accidents, one or sometimes multiple parties are clearly, if not blatantly to blame. What no-fault laws pertain to is the fact that drivers do not have to deal with another party’s insurance company in the aftermath of an accident. Instead, they deal directly with their own insurance company.”

And so, if no-fault laws are about dealing with insurance companies, how does Personal Injury Protection enter the equation? That is where the discussion turns to how much is actually covered — and how much is not.

“PIP coverage pays for medical expenses regardless of who caused the vehicle accident,” commented Evans C. Agrapidis, whose areas of specialization include representing clients who have been injured in fall down cases, motor vehicle accidents, work-related accidents, construction site accidents, and a wide variety of other personal injury categories. “PIP coverage has two parts. The first part pertains to coverage for the cost of treatment that injured parties receive from medical providers such as hospitals and doctors, along with any additional medical equipment that may be required to treat various injuries. The second part pertains to reimbursements of certain expenses that are directly or indirectly generated due to the vehicle accident, such as lost wages and hiring a domestic or personal caretaker.”

In New Jersey — which is where Evans C. Agrapidis’ firm is located (Jersey City and Hasbrouck Heights)— policyholders generally choose between two types of auto insurance: basic and standard (which is the most common). The basic option provides up to $15,000 of PIP coverage per person, per accident, and up to $250,000 for certain injuries. The injuries encompass permanent or significant brain injury, spinal cord injury or disfigurement, medical treatment of additional significant or permanent injuries rendered at a trauma center or acute care hospital immediately following a vehicle accident until the individual is stable. The standard option covers up to $250,000 of PIP coverage, but can be lowered at a policyholder’s request. Furthermore, the standard option provides up to $250,000 for certain injuries covered by the basic option, regardless of the selected limit. For example, a policyholder who opts for standard PIP coverage and reduces the coverage from $250,000 to $100,000 may still be entitled to $250,000 of coverage for the aforementioned specific types of injuries. After PIP coverage is exhausted, the policyholder’s health insurance takes over.

There is another aspect of PIP coverage that people need to know: every time they file a PIP claim, they are responsible for paying 20 percent of the difference between their deductible and $5,000. For example, take an individual who lists their car insurance as their primary insurance and pays a $700 deductible, and incurs $15,000 in medical expenses due to a vehicle accident. This individual would be responsible for paying $1,560 ($700 deductible plus $860, which is $5,000 - $700 x 20%). Their insurer would then pick up the remaining $13,440 ($15,000 - $1,560).

“Some people choose basic coverage because the premium is lower than standard coverage,” commented Evans C. Agrapidis, who was admitted to the New Jersey State and New Jersey Federal Bars in 1983, the New York State and New York Federal Bars in 1985, and is currently a member of the Bar of the U.S. Supreme Court. “However, the difference in price is actually quite negligible, and considering the potentially catastrophic financial consequences of not having enough coverage, paying a little bit more now to potentially avoid paying a tremendous amount later is a smart move.”

Another important and not widely known benefit of PIP coverage (which is sometimes referred to as “no-fault insurance”) is that it significantly speeds up the medical claims process, which means that people injured in a vehicle accident do not have to wait for insurance companies.

“When someone is hurt in a motor vehicle accident, all of their focus and attention should be on getting the treatment and support they need to make a recovery,” commented Evans C. Agrapidis. “With adequate PIP coverage, they can focus on convalescing instead of worrying, along with their family members, of whether they will be able to pay for medical bills that are invariably higher than most people anticipate. Plus, health insurance usually has significantly higher deductibles, co-pays, and coinsurance than auto insurers, and health insurers may oblige individuals to be treated by a specific network of doctors and other medical professionals.”