In New Jersey, if you have your own auto insurance and are injured in a car accident, it is your own insurance company that pays for your medical treatment. This is known as No Fault insurance, i.e. regardless of fault, your insurance company pays.
The system generally does not effect your personal injury claim, if the other driver is at fault and the other driver is driving a personal vehicle (i.e. not a commercial vehicle) and insured by an insurance company that is licensed to do business in New Jersey. In such a case, each driver's PIP policy covers the medical bills, and this is completely segregated from your personal injury claim.
But according to N.J.S.A. 39:6A-9.1, your own PIP insurance carrier has the right to reimbursement of the money that they paid for your medical treatment if: the other driver is at fault, and the other driver was operating either a commercial vehicle or a was insured by a carrier that is not licensed to do business in New Jersey. This had very severe implications when PIP carriers essentially "looted" the other driver's insurance policy, and left the injured person with little or no insurance money to recover. In other words, say you were injured in an accident and the other driver was from New York and insured by a $50,000 policy through Countrywide Insurance, which is not licensed to do business in New Jersey. Your insurance company pays $45,000 in medical expenses under your PIP policy and then collects all $45,000 in PIP reimbursement from Countrywide. That would leave you with only $5,000 left to collect under the Countrywide policy as compensation for your injuries.
Yet another reason why it's important for you to purchase as much Underinsured Motorist coverage as you can afford .
Plaintiffs have filed law suits and asked the courts to declare that the injured person, not the insurance company, should have the "first bite at the apple" since it is unfair that a plaintiff's own insurance company would "loot" the defendant's insurance policy, leaving the plaintiff with nothing. In a very controversialSupreme Court opinion, Fernandez v. Nationwide Mutual Insurance Company, the Supreme Court sided with the insurance companies.
Gov. Chris Christie just recently signed into law S-191, which changes the Supreme Court's opinion . Now, it is the injured plaintiff who has first dibs at the defendant's insurance policy, and whatever is left may be available to reimburse the PIP carrier for medical expenses.
There are several things that you need to remember to do (and not to do) after an automobile accident. But if you would like to know whether you have a case for automobile negligence, what kind of value your case may have, and what you can expect, you should
Remember, the insurance companies have teams of skilled attorneys who are aggressively representing their interests, and you should too.