No-Fault State Question

[maverick02]

Hi, I live in NJ, which is a no fault-state. My understanding of this is that in an accident, everyone uses their own auto insurance to cover their medical bills (PIP), regardless of fault and your right to sue is significantly limited. In that case, what do I get by carrying "Uninsured & Underinsured Motorist" protection, since I have to use my own auto insurance for medical coverage anyways? Also, does it make sense to get Uninsured & Underinsured Motorist Property Damage (UUMPD) coverage that is worth more than the value of the car? For example, if my car is worth $15,000, would it make sense to get UUMPD that covers more than $15,000 ? Thanks!

 

[joshb]

Hi, I live in NJ, which is a no fault-state. My understanding of this is that in an accident, everyone uses their own auto insurance to cover their medical bills (PIP), regardless of fault and your right to sue is significantly limited. In that case, what do I get by carrying "Uninsured & Underinsured Motorist" protection, since I have to use my own auto insurance for medical coverage anyways? Also, does it make sense to get Uninsured & Underinsured Motorist Property Damage (UUMPD) coverage that is worth more than the value of the car? For example, if my car is worth $15,000, would it make sense to get UUMPD that covers more than $15,000 ? Thanks!

Florida is also a no-fault state, but the PIP coverage is limited to 80% of your medical bills, 60% of your lost wages not to exceed $10,000 combined. It is very easy to surpass $10,000 so I always recommend UM. I have two claims going on right now where UM is about to max out. Don't have UMPD in our state so I can't comment on that.

 

[AnMarieB]

Hi, I live in NJ, which is a no fault-state. My understanding of this is that in an accident, everyone uses their own auto insurance to cover their medical bills (PIP), regardless of fault and your right to sue is significantly limited. In that case, what do I get by carrying "Uninsured & Underinsured Motorist" protection, since I have to use my own auto insurance for medical coverage anyways? Also, does it make sense to get Uninsured & Underinsured Motorist Property Damage (UUMPD) coverage that is worth more than the value of the car? For example, if my car is worth $15,000, would it make sense to get UUMPD that covers more than $15,000 ? Thanks!

What is the premium difference in NJ for PIP vs UM?

I know in Texas, which requires PIP on every auto policy unless specifically rejected in writing, PIP can be quite expensive in some cases compared to UM. This is because a company can not subrograte on a PIP claim but can on a UM claim.

I agree with your point on the UMPD limit. Texas also offers UMPD and it doesn't make much sense to carry a limit significantly higher than the value of your vehicle.

AnMarie Bozick, CIC
Software Solutions for Insurance Agents

 

[djs]

I have no idea what the answer to this question is. Why?
California is an 'everyone is at fault but me' state!!!

Dan

 

[Josh]

Yes, if your car is worth more than the UUMPD you need to up it to the point where it will cover the damage in your car if someone takes off. In NY, it's different, guy takes off with no coverage it's a no-fault collision claim.

"Limiting your right to sue", not sure what you mean by that. NY is also a no-fault state and I love it for that, but I strongly believe in maxing out uninsured/underinsured coverage because I don't expect anyone else to believe in insurance as much as I do. Also, the head cashier at Walmart is probably only protecting their income level with their insurance and I wouldn't expect them to carry the same limits I do, because they're protecting against a different risk. Would I like them to? Sure. Do I think it would be the responsible thing? Yes. But I keep my expectations low and then if someone with minimal limits or no coverage at all hits me then I'm covered. The best part is that the difference in coverage isn't as much as one might think.

 

[maverick02]

Yes, if your car is worth more than the UUMPD you need to up it to the point where it will cover the damage in your car if someone takes off. In NY, it's different, guy takes off with no coverage it's a no-fault collision claim.

"Limiting your right to sue", not sure what you mean by that. NY is also a no-fault state and I love it for that, but I strongly believe in maxing out uninsured/underinsured coverage because I don't expect anyone else to believe in insurance as much as I do. Also, the head cashier at Walmart is probably only protecting their income level with their insurance and I wouldn't expect them to carry the same limits I do, because they're protecting against a different risk. Would I like them to? Sure. Do I think it would be the responsible thing? Yes. But I keep my expectations low and then if someone with minimal limits or no coverage at all hits me then I'm covered. The best part is that the difference in coverage isn't as much as one might think.

I don't understand though what do you get out of uninsured/underinsured coverage though? In a no-fault state, if someone hits you and you need medical coverage, you are covered under your own insurance's PIP. It doesn't matter whether you or the other driver is at fault, everyone turns to their own auto insurance for medical coverage following an accident, as I understand. Therefore, if I get into an accident with an uninsured/underinsured driver, don't I still have to turn to my insurance for any medical coverage I may need? If anything, it's the uninsured/underinsured driver who gets screwed because he has no medical coverage.

 

[RenegadeAgent]

In that case, what do I get by carrying "Uninsured & Underinsured Motorist" protection,

Uninsured & Underinsured Motorist coverage would offer protection to you if an uninsured or underinsured motorist causes serious harm to you. Since you wouldn't be able to satisfy the damages out of their policy, you could come back to your own policy for coverage.

No-Fault insurance means that you can only sue for limited reasons (like permanent injury or death). But those are two cases where I would want sufficient coverage on my own policy.

 

[joshb]

I don't understand though what do you get out of uninsured/underinsured coverage though? In a no-fault state, if someone hits you and you need medical coverage, you are covered under your own insurance's PIP. It doesn't matter whether you or the other driver is at fault, everyone turns to their own auto insurance for medical coverage following an accident, as I understand. Therefore, if I get into an accident with an uninsured/underinsured driver, don't I still have to turn to my insurance for any medical coverage I may need? If anything, it's the uninsured/underinsured driver who gets screwed because he has no medical coverage.

There is a limit to the PIP coverage (in most states). What happens if you go beyond the limit in medical bills? Thats when UM comes into play.

For example, I had a customer who was rearended, not at fault, and was sent to the ER. He was there 4 hours and his bill is $28,000. In Florida, Pip maxes out at 10,000. The other driver had no insurance. So he received is 10,000 benefit now he still owes 18,000. Um will pay out 18,000. In his case though he got a lawyer that takes 35% so he will get 18,000 from UM, but owe 35% to a lawyer, so he will still need to come up with 35% on his own (unless the lawyer can over inflate the claim by 35%, but in this case it doesn't look like it).

 

[djs]

There is a limit to the PIP coverage (in most states). What happens if you go beyond the limit in medical bills? Thats when UM comes into play.

For example, I had a customer who was rearended, not at fault, and was sent to the ER. He was there 4 hours and his bill is $28,000. In Florida, Pip maxes out at 10,000. The other driver had no insurance. So he received is 10,000 benefit now he still owes 18,000. Um will pay out 18,000. In his case though he got a lawyer that takes 35% so he will get 18,000 from UM, but owe 35% to a lawyer, so he will still need to come up with 35% on his own (unless the lawyer can over inflate the claim by 35%, but in this case it doesn't look like it).

If I understand correctly, the lawyer basically filed a claim with the insurance company, got paid $6000 for a half hour work and left the client hanging?

I should of been a lawyer!!!!

Dan

 

[maverick02]

There is a limit to the PIP coverage (in most states). What happens if you go beyond the limit in medical bills? Thats when UM comes into play.

For example, I had a customer who was rearended, not at fault, and was sent to the ER. He was there 4 hours and his bill is $28,000. In Florida, Pip maxes out at 10,000. The other driver had no insurance. So he received is 10,000 benefit now he still owes 18,000. Um will pay out 18,000. In his case though he got a lawyer that takes 35% so he will get 18,000 from UM, but owe 35% to a lawyer, so he will still need to come up with 35% on his own (unless the lawyer can over inflate the claim by 35%, but in this case it doesn't look like it).

I'm seeing here in NJ, that most insurance companies default to 250K PIP with $250 deductible with rates that are not all that bad. But 250K is a lot of money.