New Jersey Car Insurance: PIP Coverage

New Jersey car insurance customers are required to have Personal Injury Protection (PIP) coverage in place. They can choose to buy only the minimum level of coverage required under state law, or a higher amount if they wish.

A person who wants to take advantage of a higher level of PIP but who is concerned about cost may want to consider setting the policy deductible at a higher level. The deductible is the amount that a policyholder agrees to pay out of pocket before the insurance company will pay out any money under the policy. When the deductible is set to a higher level, the insurance company rewards the customer with lower rates.

When an accident occurs, the policyholder must pay the deductible, and then the insurance company will start to pay benefits. The policyholder is responsible for a 20 percent co-payment for medical expenses on the first $5,000 in medical bills. The insurance company will pay 80 percent of the amount owing.

Optional coverage available under a PIP policy includes income support if the policyholder is unable to work for a time after the accident. Essential services coverage is also offered, and it pays for housecleaning, shoveling snow and housecleaning after an accident.

A death benefit and funeral coverage are other options available under a PIP plan. Reasonable funeral expenses are covered, up to the policy limit chosen.