13 Jan IN NEW JERSEY HEALTH INSURANCE CAN HURT WHEN IT IS PRIMARY OVER PIP
Automobile insurance companies now offer to allow consumers to choose health insurance as their primary option to pay motor vehicle crash-related bills. This was part of an automobile insurance reform package passed several years ago. Before this change to the law your automobile insurance would cover automobile crash-related bills first then if anything was not covered you could submit them to your health insurance carrier.
So, many people now choose “health insurance primary” when purchasing or renewing auto insurance policies. This could save you a few bucks on your policy but you may pay for it dearly later.
There are several reasons for this but I will highlight two: (1) Your health insurance is probably through your employer or spouse’s employer. It many circumstances they will refuse to be primary insurers for automobile crash injuries and will assert a lien on any amounts they pay for your care. This means you pay for your own care out of your own money – the proceeds of your case. Result: you lose. (2) Maybe you lose your health insurance for some reason after you take out your auto policy. Now to get the auto carrier to pay your medical bills they assess a penalty that probably costs more than the actual cost of primary PIP coverage. Result: you lose.
So, take care to review your policy and speak to a competent professional before choosing “health insurance primary” on your auto insurance policy. It can hurt you in the end if you wind up with wrong coverage.