The New Jersey auto insurance premiums were a big mess earlier, because they were among the most expensive nationwide. Insurers were in fact, fleeing the scene and there were angry motorists who were protesting on the streets in Trenton.
However, in 2003, Gov. James E. McGreevey’s administration spearheaded the reforms, that not only brought in more competition, but also lowered the prices as well. Yet, these changes did not do anything for the PIP coverage, which covers medical costs for accident victims.
Bringing about changes in PIP coverage meant battling with two groups – the doctors and the lawyers and the Gov. McGreevy administration believed that they would do better without indulging in these battles that would hinder the progress of the overall reforms. Hence, he did what he thought was the best – just fixed what he could.
At present, the PIP costs seem to be spiraling out of control and NJ motorists are still paying far more than motorists in the other states, and that is giving rise to some angst once again. The average claim has gone up by 65% over the last decade. It had gone up to $16,397 during 2010, partly because of the rise in medical costs. This is more than double when compared to the rest of the no-fault states. The increase in PIP costs in NJ has far outpaced the medical costs in any other place in general.
Hence, something must be done in order to curb these rising auto insurance premiums. According to the administration’s plans, it would address three cost drivers such as legal costs, fraud, and medical costs and this appears to be quite sensible.
Even the healthcare providers cannot fake their billing any more, as more codes are added where a number of procedures and treatments would be covered and standard prices would be set. While treating injured drivers, only the treatments that have been outlined in the medical journals will get full coverage.
Patients should have an opportunity to see anyone they choose to, in order to treat them. However, limiting these treatment options to the ones that are recognized by the medical community seems to make sense and is also a standard practice, states Lauren Townsend from NJ Citizen Action.
He also added that placing 2,000 treatments on a proper fee schedule will give consumers more value for their money. Since most NJ motorists have $250,000 in PIP coverage, with the containment in costs, it will take them further.
