Law Offices of Jan Meyer and Associates, P.C.
Guide to Recovery of PIP in New Jersey
With Other Selected New Jersey Laws Related to Subrogation
By: Noah Gradofsky, Esq.
Edited by: Jan Meyer, Esq.
(201) 862-9500
(201) 862-9400 (Fax)
njpip@janmeyerlaw.com

Click here to download our printable Quick Guide to New Jersey PIP Recovery (Last udpated June 7, 2016).

Click here for our Guide to Recovery of PIP in New York.

This is a basic primer on New Jersey law as pertaining to recovery of no-fault (AKA "PIP") payments.  It by no means covers all the intricacies of New Jersey law, and therefore should be used as reference only. Some issues of law may be mentioned more than once on this page, where we felt the issue belongs under more than one heading.  This document is provided as a reference guide only and is provided subject to this disclaimer. This page is current as of May 16, 2016. If you have been here before and want to look for newly added information please see the update log below.

Click on individual terms to see how they are defined in New Jersey PIP Law or to access further discussion of a particular issue (note that many of the definitions and discussions will come up in the frame at the bottom of the page). The best way to view this guide is to browse the table of contents in the top frame. Click on the subject of interest, and you will see the discussion in the bottom frame. CLICK HERE IF YOU DO NOT SEE THE BOTTOM FRAME Note that some terms are left undefined, either because the definitions are intuitive, or because they are beyond the scope of this guide.

OVERVIEW (see "Contents" below for links to each topic and their subtopics):

RECENT DEVELOPMENTS IN NEW JERSEY PIP LAW
 

UPDATE LOG FOR THIS WEB PAGE
In the future, additional information added to this web page will be listed here so that if you check this page periodically, you can easily find updated information.

CONTENTS:


N.J.S.A. 39:6A-9.1:Recovery of PIP from certain torfeasors, statute of limitations, arbitration requirement.

a. An insurer, health maintenance organization or governmental agency paying benefits pursuant to subsection a., b. or d. of section 13 of P.L.1983, c. 362 (C.39:6A-4.3), personal injury protection benefits in accordance with section 4 or section 10 of P.L.1972, c. 70 (C.39:6A-4 or 39:6A-10) , medical expense benefits pursuant to section 4 of P.L.1998, c. 21 (C.39:6A-3.1) or benefits pursuant to section 45 of P.L.2003, c.89 (C.39:6A-3.3), as a result of an accident occurring within this State, shall, within two years of the filing of the claim, have the right to recover the amount of payments from any tortfeasor who was not, at the time of the accident, required to maintain personal injury protection or medical expense benefits coverage, other than for pedestrians, under the laws of this State, including personal injury protection coverage required to be provided in accordance with section 18 of P.L.1985, c. 520 (C.17:28-1.4), or although required did not maintain personal injury protection or medical expense benefits coverage at the time of the accident.

b. In the case of an accident occurring in this State involving an insured tortfeasor, the determination as to whether an insurer, health maintenance organization or governmental agency is legally entitled to recover the amount of payments and the amount of recovery, including the costs of processing benefit claims and enforcing rights granted under this section, shall be made against the insurer of the tortfeasor, and shall be by agreement of the involved parties or, upon failing to agree, by arbitration. Any recovery by an insurer, health maintenance organization or governmental agency pursuant to this subsection shall be subject to any claim against the insured tortfeasor's insurer by the injured party and shall be paid only after satisfaction of that claim, up to the limits of the insured tortfeasor's motor vehicle or other liability insurance policy.

Summary of N.J.S.A. 39:6A-9.1:

Notes on N.J.S.A 39:6A-9.1:

  • APIP (Additional-PIP) has the same recovery rights and procedures as PIP. What about Medpay? N.J.S.A. 39:6A-9.1 speaks of the right of recovery for an insurer "paying . . . personal injury protection benefits in accordance with section 4 or section 10 of P.L. 1972, c. 70 (C. 39:6A-4 or 39:6A-10)." While 39:6A-4 covers regular PIP, 39:6A-10 covers APIP. This means that claims paid under a New Jersey APIP policy will be recoverable in the same situations that PIP is recoverable, and the same rules of recovery will apply (for example, the requirement to arbitrate if the tortfeasor is insured).

  • PIP is recoverable from non motor-vehicle tortfeasors (e.g. a bar serving alcohol). N.J.S.A. 39:6A-9.1 allows recovery from any tortfeasor not required to/not carrying PIP. This means not only vehicles not requiring PIP, but any tortfeasor which is not a vehicle. For example, a bar (i.e. dram shop) serving alcohol is subject to recovery for its negligent service of alcohol. State Farm Mut. Auto. Ins. Co. v. Licensed Beverage Ins. Exchange, 146 N.J. 1 (1996)("We hold that the reimbursement right conferred by section 9.1 encompasses all tortfeasors that are not subject to the No-Fault law."). The holding in State Farm is seemingly confirmed by the later addition of language to N.J.S.A. 39:6A-9.1(b) referring to recovery of PIP from the "insured tortfeasor's motor vehicle or other liability insurance policy" which indicates that the right of recovery encompasses non-motor-vehicles. Presumably, this reasoning would also apply liability for PIP reimbursement to social host for service of alcohol as well, with the possible exception of the PIP carrier seeking reimbursement of PIP benefits paid for intoxicated adult driver, since N.J.S.A. 2A:15-5.7 explicitly states that a person of drinking age cannot sue a social host for injuries resulting from providing alcohol to that person (however, since as noted above, recovery of PIP is a direct right, not a subrogated right, the restriction on recovery by an intoxicated adult probably should not apply to the PIP carrier's reimbursement right). Please visit our New Jersey Dram Shop and Social Host Liability Law web page for further discussion of New Jersey's liquor liability laws (link opens in new tab).

    Note that recovery from tortfeasors other than motor vhicles, if they are insured, should be through arbitration against the insurer as is the case where the tortfeasor is a motor vehicle.

  • PIP is not recoverable from a "public entity" or a "public employee." N.J.S.A. 59:9-2(e) prohibits tort subrogation against "a public entity or public employee." (see further discussion below). Although, technically, PIP recovery is a direct right of recovery and not subrogation, and technically the recovery is against the insurer rather than the tortfeasor, Hanover Ins. Co. v. Borough of Atl. Highlands, 310 N.J.Super. 568 (App.Div. 1998), certif. denied, 156 N.J. 383 (1998) held that N.J.S.A. 59:9-2(e) applies to prohibit recovery of PIP from the public entity/employee.
  • PIP is not recoverable from a federal vehicle. Cont'l Ins. Co. v. United States, 335 F. Supp. 2d 532 (D.N.J. 2004).
  • Attorneys fees are (probably) not recoverable as "costs of . . . enforcing rights granted under this section." Although N.J.S.A. 39:6A-9.1 allows for recovery of "the costs of processing benefit claims and enforcing rights granted under this section," David v. Gov't Employees Ins. Co., 360 N.J.Super. 127, 144-149 (App.Div. 2003) held that this right of recovery did not include a right to recover attorney fees, but, rather, administrative costs. However, part of the rationale of David was that the court worried that subjecting the tortfeasor's carrier's policy to liability for attorney fees would reduce the insurance limits available to the injured party for the bodily injury claim. Since N.J.S.A. 39:6A-9.1(b) now explicitly provides that the PIP reimbursement claim may only be paid after the bodily injury claim is paid, this rationale for David no longer applies, and perhaps this point should be revisited in future litigation. Note that in David the court said that the right of recovery "may allow recovery of costs of the arbitration process itself."
  • New Jersey law does not prohibit subrogation of PIP benefits paid for an out-of-state accident. N.J.S.A. 39:6A-9.1 refers to "an accident occurring within this State." Although no New Jersey court has addressed this issue under the current N.J.S.A. 39:6A-9.1, USAA Cas. Ins. Co. v. Smith, 2013 WL 4881838 (N.D.W.V. Sept. 12, 2013) (click here for outside link to read this case) and Giancola v. Thrifty Rent-A-Car Sys., Inc., 569 So. 2d 849, 850 (Fla. Dist. Ct. App. 1990) (click here for an outside link to read this case) have concluded based on Cirelli v. Ohio Casualty Ins. Co., 72 N.J. 380 (1977) (decided under the former N.J.S.A. 39:6A-9) that New Jersey law does not prohibit a New Jersey PIP carrier from subrogating its PIP payments for accidents occurring outside of New Jersey. Further support for this conclusion can be found in Perreira v. Rediger, 169 N.J. 399, 416 (N.J. 2001), where the court discussed a regulation permitting subrogation clauses and wrote that "the regulations ... must be interpreted narrowly as limited to cases in which the collateral source rule does not apply, for example, a case in which choice of law principles require application of the law of a jurisdiction with a collateral source rule at variance from our own." Note that depending on a number of factor as to choice of law, the accident state's laws might prevent subrogation.
  • What if PIP is paid to a pedestrian? If a pedestrian is struck by an automobile, the pedestrian receives PIP benefits from his/her own PIP coverage, since N.J.S.A. 39:6A-4 specifies that an "automobile"'s PIP policy applies where an insured sustains an injury "as a pedestrians, caused by an automobile or by an object propelled by or from an automobile[.]" Note that the coverage that applies is the pedestrian's insurer's policy. The automobile that strikes a pedestrian has no PIP obligation. If the pedestrian does not have his/her own PIP coverage, the pedestrian can collect PIP from the New Jersey Property-Liability Insurance Guaranty Association (NJPLIGA) per N.J.S.A. 17:30A-1 et. seq. If the driver of the automobile striking the pedestrian is properly insured, the driver of the automobile will not be liable for the PIP, because the driver will have been required to carry PIP and will have had PIP and thus N.J.S.A.39:6A-9.1 will not afford a right of recovery. If the driver of the automobile was not properly insured, then that driver would be liable for PIP recovery per N.J.S.A. 39:6A-9.1. If the pedestrian was struck by a non-automobile, then the person's automobile carrier should not pay PIP in the first place. See discussion below regarding this situation and potential rights of recovery.
  • Certain legal questions may go to the courts rather than arbitration. N.J.S.A. 39:6A-9.1 requires that where the tortfeasor who is subject to PIP reimbursement claims is insured, "the determination as to whether an insurer ... is legally entitled to recover ... shall be by agreement of the involved parties or, upon failing to agree, by arbitration." Similarly, in N.J.S.A. 39:6A-11 the statute says that where multiple PIP policies apply to the same injrued party, the carriers, "shall be entitled to recover ... only by inter-company arbitration or inter-company agreement, an equitable pro-rata share of the benefits paid." In State Farm Indem. Co. v. National Liab. & Fire Ins. Co., 439 N.J. Super. 532 (2015) an insurer being sought after for pro-rata contribution claimed that the injured party was not a resident of their household. They argued that this was a "coverage question" that needed to be decided by the court before the arbitration requirement of N.J.S.A. 39:6A-11 kicked in. The Appellate Division disagreed and indicated that almost any question regarding pro-rata recovery should be decided through arbitration. The court's opinnion in State Farm seems quite different from its indications in Coach USA, Inc. v. Allstate New Jersey Ins. Co., 354 N.J.Super. 277 (App.Div.), certif. den,, 175 N.J. 170 (2002). In that case, the court decided that a bus carrying bus-PIP was not liable for at-fault PIP reimbursement claims under N.J.S.A. 39:6A-9.1. The court rejected the suggestion that this issue was subject to the arbitration requirement in N.J.S.A. 39:6A-9.1 saying, "we reject Allstate's argument that this dispute, which involves a recurrent issue of statutory interpretation, should have been subject to the vagaries of separate and endlessly-initiated arbitration proceedings under authority granted by the arbitration provisions of N.J.S.A. 39:6A-9.1. The issue presented, a purely legal one, is 'much more within the expertise of the court' than of arbitrators." Coach 354 N.J. Super. at 282. The court in State Farm did not discuss Coach and how it could be distinguished. Potential distinguishing factors include how "purely legal" the question presented was (and hence how likely the issue was to result in multiple identical arbitration cases which could be avoided if the court established a rule) as well as the fact that Coach dealt with N.J.S.A. 39:6A-9.1 while State Farm addressed N.J.S.A. 39:6A-11 (though the arbitration requirement in both statutes seem reasonably similar).

  • N.J.S.A. 39:6A-11: Pro-rata sharing when more than one PIP policy applies (rare)

    If two or more insurers are liable to pay benefits under sections 4 and 10 of P.L.1972, c. 70 (C.39:6A-4 and 39:6A-10) under a standard automobile insurance policy for the same bodily injury, or death, of any one person, the maximum amount payable shall be as specified in those sections 4 and 10 of P.L.1972, c. 70 (C.39:6A-4 and 39:6A-10) , section 4 of P.L.1998, c. 21 (C.39:6A-3.1) and section 45 of P.L.2003, c.89 (C.39:6A-3.3), respectively, if additional first party coverage applies and any insurer paying the benefits shall be entitled to recover from each of the other insurers, only by inter-company arbitration or inter-company agreement, an equitable pro-rata share of the benefits paid.

    Summary of N.J.S.A. 39:6A-11

    If a person is entitled to PIP/APIP benefits under more than one policy, then:

    Notes on N.J.S.A 39:6A-11

    N.J.S.A. 39:6A-6 Recovery of PIP from Worklers' Compensation and Disability Carriers.

    39:6A-6 Collateral source.

    The benefits provided in sections 4 and 10 of P.L. 1972, c. 70 (C.39:6A-4 and 39:6A-10), the medical expense benefits provided in section 4 of P.L. 1998, c. 21 (C. 39:6A-3.1) and the benefits provided in section 45 of P.L. 2003, c. 89 (C. 39:6A-3.3) shall be payable as loss accrues, upon written notice of such loss and without regard to collateral sources, except that benefits, collectible under workers' compensation insurance, employees' temporary disability benefit statutes, Medicare provided under federal law, and benefits, in fact collected, that are provided under federal law to active and retired military personnel shall be deducted from the benefits collectible under sections 4 and 10 of P.L. 1972, c. 70 (C. 39:6A-4 and 39:6A-10), the medical expense benefits provided in section 4 of P.L. 1998, c. 21 (C. 39:6A-3.1) and the benefits provided in section 45 of P.L. 2003, c. 89 (C. 39:6A-3.3).

    If an insurer has paid those benefits and the insured is entitled to, but has failed to apply for, workers' compensation benefits or employees' temporary disability benefits, the insurer may immediately apply to the provider of workers' compensation benefits or of employees' temporary disability benefits for a reimbursement of any benefits pursuant to sections 4 and 10 of P.L. 1972, c. 70 (C. 39:6A-4 and 39:6A-10), medical expense benefits pursuant to section 4 of P.L. 1998, c. 21 (C. 39:6A-3.1) or benefits pursuant to section 45 of P.L. 2003, c. 89 (C. 39:6A-3.3) it has paid.

    Summary of N.J.S.A. 39:6A-6:

    Notes on N.J.S.A 39:6A-6:

    Other selected New Jersey laws related to subrogation.

    Primary, excess, and co-primary coverage.

  • NJ does not allow tort subrogation against a "public entity" or a "public employee". N.J.S.A. 59:9-2(e) states that "[n]o insurer or other person shall be entitled to bring an action under a subrogation provision in an insurance contract against a public entity or public employee." Notes:
  • Uninsured/Underinsured Motorist Subrogation (UM/UIM)