In a recent decision, Wise v. Marienski, the New Jersey Superior Court, Law Division, held that victims of automobile accidents are not precluded from recovering medical expenses from the tortfeasor beyond those paid under a personal injury protection (“PIP”) insurance policy.

Prior to this decision, New Jersey courts had held that car accident victims could not recover damages for medical expenses that exceeded their PIP coverage pursuant to New Jersey’s “No Fault Act,” the statute which governs car insurance law in the State.  Thus, for example, an insured person with $15,000 in PIP coverage could only recover a maximum of $15,000 for medical expenses, even if their total medical expenses exceeded that cap.

The rationale behind the previous rulings was simple: those purchasing insurance have the option to buy more coverage at the cost of an increased premium. The benefit of less PIP coverage is a reduced premium rate. The thinking was that to allow a victim to pay a reduced premium, and then later allow that victim to sue for recovery of those medical expenses which exceed the victim’s chosen cap would be tantamount to letting the victim “have his cake and eat it, too.”

The Wise Court disagreed (Correctly in my opinion).

While the No Fault Act explicitly prohibits a victim from introducing at trial evidence of the amounts paid as PIP benefits under a standard automobile insurance policy, including “deductibles, copayments or exclusions,” it also provides that victims are not restricted from seeking recovery for uncompensated economic loss.

The Wise Court determined that because the No Fault Act defines “economic loss” as including “medical expenses,” it follows that victims must be allowed to sue for recovery of those medical expenses which exceed their PIP coverage.