Potential Auto Insurance Reforms in New Jersey

Day 163/365 : Manduria e gli ossimori temporali
~jjjohn~ / Foter.com / CC BY-NC-ND

In New Jersey, part of the legislature moves to change the current auto insurance laws to control escalating auto accident costs to insurers.  The decision has created uproar on medical professionals who claim that such insurance reforms can potentially deny critical medical care for people injured in auto accidents.

All drivers in New Jersey are required to have automobile insurance policies which include at least property damage liability and personal injury protection (PIP) coverage. The PIP makes it possible for individuals injured in an automobile accident to claim personal injury damages to cover medical costs without any regard to whose fault the accident is. Individuals with basic auto insurance have a limited right to seek damages if an automobile accident occurs.

PIP coverage ranges from $15,000 for each injured person to $250,000 for each injured person per accident if the insured individual sustained significant or permanent spinal cord or brain injuries. The susceptibility of the PIP coverage to fraud has caused some New Jersey state lawmakers to cap the amount of medical care charges by health care facilities. In fact, the Coalition Against Insurance Fraud estimates that fraud and abuse on auto insurance in New Jersey cost about $800 million annually.

Not surprisingly, many medical professionals have opposed these caps and argued that the new rules would have a negative impact on insured individuals who are severely injured in motor vehicle accidents because they will be less likely to receive proper medical care if price caps are in place. The continuous pressure of medical professionals caused lawmakers to remove caps on back and spinal injuries and outpatient care, and planned on putting caps on pain medication treatments instead.

New Jersey motorists are concerned about the high cost and potentially reduced coverage of auto insurance. However, you can control your future auto insurance costs by:

  • Raising your deductibles
  • Choosing the option of “new limitation on lawsuit” instead of the “zero dollar threshold” option
  • Investigating insurance discounts
  • Taking a state-approved defensive driving course
  • Buying a car with various safety features
  • Maintaining a good driving record by driving safely

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