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Motor Vehicle Torts - Recoupment of Medical Expenses Beyond Your Personal Injury Protection (PIP) Limit

June 08, 2017

MICHAEL J. RANKIN reports on a recent New Jersey Appellate Division decision dealing with whether injured motorists who opted for the $15,000 minimum in personal injury protection (PIP) benefits in their standard automobile insurance policy may recover medical expenses exceeding that amount in New Jersey.  Two automobile negligence actions were addressed in this single decision by the Appellate Division because the actions shared this common legal question.  The Appellate Division held that the New Jersey PIP statutes limiting PIP recovery apply only to copayments and deductibles. 

As way of background, a driver’s PIP benefits generally pay for, amongst other things, the driver's medical and rehabilitative expenses incurred after suffering an injury in a car accident in New Jersey regardless of who was at fault in the accident.  However, the extent of your PIP benefits is determined in part by New Jersey law, and in part by the coverage limits of the policy providing benefits to you.

In this case, each Plaintiff was injured in a car accident and incurred more than $15,000 in medical expenses. The PIP coverage in each Plaintiff’s standard automobile insurance policy was limited to $15,000 per person, per accident. Plaintiffs sought to recover those expenses exceeding $15,000 from the alleged negligent Defendants. 

After examining the subject statutes, including the legislative history for each, and New Jersey Supreme Court precedent, the Appellate Division concluded that the legislature intended an insured covered with a standard policy may recover from the tortfeasor medical expenses above the PIP limit in his or her policy up to $250,000.  The Appellate Division noted that the legislature permitted drivers to choose PIP limits of $15,000, $50,000, $75,000 or $150,000 in order to limit premiums.  The legislature did not, however, include language that limited recovery for medical expenses that exceeded copayments and deductibles.  Having the right to recover a claim against a tortfeasor for medical expenses not covered by PIP does not result in a windfall for those who, in exchange for reduced PIP benefits, paid lower premiums because these expenses are owed to their medical providers.  “Plaintiffs are not having their cake and eating it, too. Their medical expenses are not instantly recoverable.  Instead, they must file suit, go through discovery process, and run the gauntlet of proving defendant’s liability, as well as the necessity and reasonableness of the medical bills, to a jury.  That process typically takes years.” 

The Appellate Division held that while certain minor medical expenses, such as copayments and deductibles, cannot be recovered, the legislature did not intend to preclude the recovery of the medical expenses at issue here, which exceeded the $15,000 PIP limits by approximately $10,000 in one and $28,000 in the other matter. 

Please contact MICHAEL J. RANKIN if you have any questions or need any assistance in connection to this subject.