A2927

ASSEMBLY, No. 2927

STATE OF NEW JERSEY

INTRODUCED MAY 5, 1997

By Assemblyman GEIST

An Act concerning personal injury protection medical expense benefits and revising various parts of the statutory law.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 4 of P.L. 1972, c. 70 (C. 39:6A-4) is amended to read as follows:

4. Personal injury protection coverage, regardless of fault.

Every automobile liability insurance policy, issued or renewed on or after [January 1, 1991] the effective date of P.L. , c. (now before the Legislature as this bill), insuring an automobile as defined in section 2 of P.L.1972, c.70 (C.39:6A-2) against loss resulting from liability imposed by law for bodily injury, death and property damage sustained by any person arising out of ownership, operation, maintenance or use of an automobile shall provide personal injury protection coverage, as defined hereinbelow, under provisions approved by the Commissioner of Banking and Insurance, for the payment of benefits without regard to negligence, liability or fault of any kind, to the named insured and members of his family residing in his household who sustained bodily injury as a result of an accident while occupying, entering into, alighting from or using an automobile, or as a pedestrian, caused by an automobile or by an object propelled by or from an automobile, to other persons sustaining bodily injury while occupying, entering into, alighting from or using the automobile of the named insured, with the permission of the named insured, and to pedestrians, sustaining bodily injury caused by the named insured's automobile or struck by an object propelled by or from such automobile.

"Personal injury protection coverage" means and includes:

a. Medical expense benefits. Payment of reasonable medical expenses in an amount not to exceed [$250,000] $15,000 per person per accident. In the event benefits paid by an insurer pursuant to this subsection on a policy issued or renewed prior to the effective date of P.L. , c. (now before the Legislature as this bill) are in excess of $75,000 on account of personal injury to any one person in any one accident, such excess shall be paid by the insurer in consultation with the Unsatisfied Claim and Judgment Fund Board and shall be reimbursable to the insurer from the Unsatisfied Claim and Judgment Fund pursuant to section 2 of P.L.1977, c.310 (C.39:6-73.1).

b. Income continuation benefits. The payment of the loss of income of an income producer as a result of bodily injury disability, subject to a maximum weekly payment of $100.00. Such sum shall be payable during the life of the injured person and shall be subject to an amount or limit of $5,200.00, on account of injury to any one person in any one accident, except that in no case shall income continuation benefits exceed the net income normally earned during the period in which the benefits are payable.

c. Essential services benefits. Payment of essential services benefits to an injured person shall be made in reimbursement of necessary and reasonable expenses incurred for such substitute essential services ordinarily performed by the injured person for himself, his family and members of the family residing in the household, subject to an amount or limit of $12.00 per day. Such benefits shall be payable during the life of the injured person and shall be subject to an amount or limit of $4,380.00, on account of injury to any one person in any one accident.

d. Death benefits. In the event of the death of an income producer as a result of injuries sustained in an accident entitling such person to benefits under this section, the maximum amount of benefits which could have been paid to the income producer, but for his death, under subsection b. of this section shall be paid to the surviving spouse, or in the event there is no surviving spouse, then to the surviving children, and in the event there are no surviving spouse or surviving children, then to the estate of the income producer.

In the event of the death of one performing essential services as a result of injuries sustained in an accident entitling such person to benefits under subsection c. of this section, the maximum amount of benefits which could have been paid such person, under subsection c., shall be paid to the person incurring the expense of providing such essential services.

e. Funeral expenses benefits. All reasonable funeral, burial and cremation expenses, subject to a maximum benefit of $1,000.00, on account of the death of any one person in any one accident shall be payable to decedent's estate.

Benefits payable under this section shall:

(1) Be subject to any option elected by the policyholder pursuant to section 13 of P.L.1983, c.362 (C.39:6A-4.3);

(2) Not be assignable, except to a provider of service benefits under this section, nor subject to levy, execution, attachment or other process for satisfaction of debts.

Medical expense benefit payments shall be subject to a deductible of $250.00 on account of injury in any one accident and a copayment of 20% of any benefits payable between $250.00 and $5,000.00.

No insurer or health provider providing benefits to an insured shall have a right of subrogation for the amount of benefits paid pursuant to any deductible or copayment under this section.

(cf: P.L.1990, c.8, s.4)

2. Section 10 of P.L.1972, c.70 (C.39:6A-10) is amended to read as follows:

10. Additional personal injury protection coverage. Insurers shall make available to the named insured covered under section 4 of P.L.1972, c.70 (C.39:6A-4), and, at his option, to resident relatives in the household of the named insured, suitable additional first party coverage for income continuation benefits, essential services benefits, death benefits and funeral expense benefits, but the income continuation and essential services benefits shall cease upon the death of the claimant, and shall not operate to increase the amount of any death benefits payable under section 4 of P.L.1972, c.70 (C.39:6A-4) and such additional first party coverage shall be payable only to the extent that the claimant establishes that the amount of loss sustained exceeds the coverage specified in section 4 of P.L.1972, c.70 (C.39:6A-4). Insurers [may] shall also make available to named insureds covered under section 4 of P.L.1972, c.70 (C.39:6A-4), and, at their option, to resident relatives in the household of the named insured or to other persons provided medical expense coverage pursuant to section 4 of P.L.1972, c.70 (C.39:6A-4), or both, additional first party medical expense benefit coverage in amounts per person per accident of $25,000, $50,000, $100,000 and in increments of $100,000 thereafter up to $500,000. The additional coverage shall be offered by the insurer at least annually as part of the coverage selection form required by section 17 of P.L.1983, c.362 (C.39:6A-23). Income continuation in excess of that provided for in section 4 must be provided as an option by insurers for disabilities, as long as the disability persists, up to an income level of $35,000.00 per year, provided that a. the excess between $5,200.00 and the amount of coverage contracted for shall be written on the basis of 75% of said difference, and b. regardless of the duration of the disability, the benefits payable shall not exceed the total maximum amount of income continuation benefits contracted for. Death benefits provided pursuant to this section shall be payable without regard to the period of time elapsing between the date of the accident and the date of death, if death occurs within two years of the accident and results from bodily injury from that accident to which coverage under this section applies. The Commissioner of Banking and Insurance is hereby authorized and empowered to establish, by rule or regulation, the amounts and terms of income continuation insurance to be provided pursuant to this section.

(cf: P.L.1990, c.8, s.11)

3. Section 2 of P.L.1977, c.310 (C.39:6-73.1) is amended to read as follows:

2. In the event medical expense benefits paid by an insurer on a policy issued or renewed prior to the effective date of P.L. , c. (now before the Legislature as this bill), in accordance with subsection a. of section 4 of P.L.1972, c.70 (C.39:6A-4), are in excess of $75,000.00 on account of personal injury to any one person in any one accident, the Unsatisfied Claim and Judgment Fund shall assume such excess up to $250,000 and reimburse the insurer therefor in accordance with rules and regulations promulgated by the commissioner; provided, however, that this provision is not intended to broaden the coverage available to accidents involving uninsured or hit-and-run automobiles, to provide extraterritorial coverage, or to pay excess medical expenses.

(cf: P.L.1990, c.8, s.14)

4. Section 7 of P.L.1972, c.198 (C.39:6-86.1) is amended to read as follows:

7. When any person qualified to receive payments under the provisions of the "Unsatisfied Claim and Judgment Fund Law" suffers bodily injury or death as a pedestrian, as defined in section 2 of P.L.1972, c.70 (C.39:6A-2), caused by a motor vehicle, including an automobile as defined in section 2 of P.L.1972, c.70 (C.39:6A-2), and a motorcycle, or by an object propelled therefrom, or arising out of an accident while occupying, entering into, alighting from, or using an automobile, registered or principally garaged in this State for which personal injury protection benefits under the "New Jersey Automobile Reparation Reform Act," P.L.1972, c.70 (C.39:6A-1 et seq.), or section 19 of P.L.1983, c.362 (C.17:28-1.3), would be payable to such person if personal injury protection coverage were in force and the damages resulting from such accident or death are not satisfied due to the personal injury protection coverage not being in effect with respect to such accident, then in such event the Unsatisfied Claim and Judgment Fund shall provide, under the following conditions, the following benefits:

a. Medical expenses benefits. Payment of all reasonable medical expense benefits in an amount not exceeding [$250,000] $15,000 per person per accident. In the event of death, payment shall be made to the estate of the decedent.

Medical expense benefit payments shall be subject to a deductible of $250.00 on account of injury in any one accident and a copayment of 20% of any benefits payable between $250.00 and $5,000.00.

b. Income continuation benefits. The payment of the loss of income of an income producer as a result of bodily injury disability, subject to a maximum weekly payment of $100.00. Such sums shall be payable during the life of the injured person and shall be subject to an amount or limit of $5,200.00, on account of injury to any one person in any one accident, except that in no case shall income continuation benefits exceed the net income normally earned during the period in which the benefits are payable.

e. Funeral expenses benefits. All reasonable funeral, burial and cremation expenses, subject to a maximum benefit of $1,000.00, on account of the death to any one person in any one accident shall be payable to decedent's estate.

Provided, however, that no benefits shall be paid under this section unless the person applying for benefits has demonstrated that he is not disqualified by reason of the provisions of subsection (a), (c), (d) or (l) of section 10 of P.L.1952, c.174 (C.39:6-70), or any other provision of law.

(cf: P.L.1990, c.8, s.101)

5. This act shall take effect on the 180th day following enactment.

STATEMENT

This bill reduces the mandatory medical expense benefits under personal injury protection coverage of an automobile insurance policy from $250,000 to $15,000 and requires insurers to offer increased coverages of $25,000, $50,000, $100,000 and in increments of $100,000 thereafter up to $500,000.

Reduces mandatory PIP medical expense benefits to $15,000 and requires insurers to offer up to $500,000 in benefits.