A Lesson in Insurance
Brown Law Firm FAQ Series
As a personal injury attorney, I sit down with all types of people that have been injured in accidents. During their initial consultation at the Brown Law Firm, there is much to discuss.
The Number One Question Asked by Clients…
Having sat down with hundreds of clients over the years, there is one question that is most frequently asked and that is “how are my medical bills going to be paid?” Not only is this a good question, but the answer surprises most people. While many believe that the person who caused the accident is responsible for your medical bills, the answer can actually be found in your own insurance policy in most cases.
I know many people shop for car insurance online and the more they click buttons, they see the premium go lower. While this may be great for your wallet in that moment, it can prove detrimental if you are injured in an accident. This may seem unfair, but it is actually designed, so you can be in charge of your own medical coverage limits regardless of fault. So let’s take a minute to review your policy to make sure you are protecting your family.
Take a look at your policy and find the section that says “Personal Injury Protection” or “PIP.” This is the section that will cover the cost of your medical bills. While the standard in New Jersey is to carry $250,000 in PIP coverage, the law now allows you to lower your coverage all the way down to $15,000. While this may lower your premium, it will leave you vulnerable if injured. As you may imagine, having a total of $15,000 to cover all of your medical treatment is not much. In fact, it can be gone by the time you leave the emergency room in some cases. That is why it is so important to try and maintain the standard $250,000 in PIP coverage.
What Happens When My PIP Runs Out?
Once you exhaust your PIP limits, you will be forced to treat for the accident under your health insurance. While this may be fine if you have good health coverage, many people do not. Additionally, government funded plans like Medicaid and Medicare will put a lien on any recovery you get for pain and suffering. What does this mean? Basically, they want their money back. So for example, if Medicaid pays out $25,000 toward your accident related treatment, Medicaid will take back the $25,000 they spent on your care, if you recover money for pain and suffering.
The same is true for ERISA plans. An ERISA plan is a self-funded plan. Many local individuals in the area have Unite Here Health. This is an example of an ERISA plan. This type of health insurance plan will also cause a lien on your recovery.
I hope this short lesson was helpful. Check back with our page next week to learn more about your insurance policy and how it can affect you if you are injured in a car accident.