Auto Insurance Question

[JHZR2]

Hi,

Renewing the auto insurance policy this year, and I had a question about PIP.

We have proper medical insurance. We have typically carried maximum PIP, which is $250k in NJ. This used to be standard on all policies, but apparently in 1999, they reduced this so that state minimum was then $15k.

The question is, how important is PIP? I have decent insurance, it is an HDHP, which I maintain sufficient funds to pay the deductible and coinsurance, beyond which, the insurer pays 100%.

So that said, is there any reason to have high PIP? Seems to me that it would just turn into a fight between auto insurance and health insurance as to who will pay for what.

If I had no/inadequate health insurance I could understand it. But is it worthwhile paying for full PIP if you have full health insurance? I am not in a position to be out of a job in the foreseeable future, which I suppose would be another consideration why.

We carry maximum coverage to protect ourselves related to liability and from damage due to others. But PIP is a bit more abstract it seems. My understanding is that our uninsured underinsured coverage would help us in the case of bodily injury, so in effect, I have $1 million of coverage for that then the pip would only figure in if the entire amount of that coverage was exhausted. Of course I suppose if I were liable, pip would be paying for me, but again, wouldn't they then fight with my medical insurer?

Thanks!

 

[Spector]

first question to ask agent is how much is saved by dropping it?

 

[daves87rs]

My state wants the other insurance (one's health plan), or they will charge you sky high rates anyways..

 

[FoxS]

The element of interest for you is income protection and expenses associated with a long term disability.

 

[JHZR2]

Originally Posted By: Spector
first question to ask agent is how much is saved by dropping it?


It's a matter of a few hundred dollars, not a ton of money, but it's all about what pays when.

For example, if I hit someone but injure myself real bad. Pip covers me. But if I have a 250k coverage level with health insurance that covers me 100% after $8000 worth of deductible plus coinsurance, will pip only really be worth 8k?

Similarly, say I incur $150k of injury at the fault of an uninsured or underinsured driver. Will pip be used first to cover my medical payments or will it be the underinsured portion of my policy? And again will they pay the full bill or will they only pay the first $8000 until my health insurance picks up 100%?

Will auto insurance even fight with my health insurance or do they typically pay everything 100% anyway as a matter of course? Just tell Struie does the payment fight get when you have good health insurance and good car insurance?

 

[Kuato]

Check w/your agent. PIP varies somewhat state to state; IIRC it can be used to pay your insurance deductibles, and/or pays first in an auto accident. (That's MD though, and it's been several years)

 

[Billy_D]

Lost wages is an important component of PIP as FoxS mentioned. You don't want to carry the state minimum. It's always a good idea to carry the maximum if you can afford it.

 

[JHZR2]

Originally Posted By: Billy007
Lost wages is an important component of PIP as FoxS mentioned. You don't want to carry the state minimum. It's always a good idea to carry the maximum if you can afford it.


Thanks, it wasnt clear that the basic full PIP included wage replacement versus injury treatment. There are optional PIP levels where one can buy wage replacement from 100/wk up to 700/wk, either capped or unlimited, but all that seems VERY expensive. I believe we pay $235/year for disability insurance through my wife's teacher union (she is forced to pay dues to it though she isnt part of it - story for another day... but at least she gets this out of it). It actually paid her for a month or two when she had our baby.

But the PIP wage replacement for disability appears MUCH more expensive than the disability insurance we buy separate.

Id still like to know if Im hit and injured by an uninsured motorist, if my uninsured/underinsured coverage for bodily injury pays first, or if PIP gets induced always first for me and my family.

 

[The_Jeff]

Read your health insurance contract. Mine is secondary pay if there's any other insurance.

I put my wife on my insurance during open enrollment, as we were expecting a kid so I upped to a "family plan". She concurrently had her own policy. This was less convenient than you'd expect with them duking it out. Turns out they have a "birthday rule" where whomever has the earlier birthday of the couple has insurance that has to pay.

Anyway I suspect it's rigged so the auto insurance pays first.

When I busted my ankle all the hospital intake forms had checkoff boxes for regular health insurance, worker's comp, or MVA.

 

[JHZR2]

Originally Posted By: eljefino
Read your health insurance contract. Mine is secondary pay if there's any other insurance.

I put my wife on my insurance during open enrollment, as we were expecting a kid so I upped to a "family plan". She concurrently had her own policy. This was less convenient than you'd expect with them duking it out. Turns out they have a "birthday rule" where whomever has the earlier birthday of the couple has insurance that has to pay.

Anyway I suspect it's rigged so the auto insurance pays first.

When I busted my ankle all the hospital intake forms had checkoff boxes for regular health insurance, worker's comp, or MVA.


OK, but what do I care? If I have a $3k high deductible before my health insurance pays 90%, and then $5k of coinsurance before they pay 100%, then so long as I have $8k of PIP, it does not matter to me, right?

As an injured party, do I really care who pays so long as someone does and Im protected?

Im not seeing a good reason to pay more to the insurance company than I need to if Im already covered. That said, Im not keen on being unprotected either...